AdvisorShares, TrimTabs Plan Equities ETF

January 20, 2011

AdvisorShares, the Bethesda, Md.-based firm known for its actively managed ETFs, filed a registration statement with the Securities and Exchange Commission outlining the liquidity-based broad U.S. equities ETF it plans to offer with TrimTabs Asset Management.

The TrimTabs Float Shrink ETF (NYSEArca: TTFS), which will be actively managed, is designed to generate long-term returns that exceed those of the Russell 3000 Index while experiencing less volatility, according to the filing, which didn’t include fees.

“The fund seeks to achieve this goal by investing in stocks with liquidity and fundamental characteristics that are historically associated with superior long-term performance,” the company said in the filing.

AdvisorShares said earlier this month it hoped to create an ETF with TrimTabs Asset Management that would look at stock prices as a function of supply and demand, rather than simply value. It said it hoped the fund will serve as an alternative to market-capitalization or fundamentally weighted core holdings.

The methodology behind TTFS looks for a decrease in outstanding shares of a company, an increase in free cash flow and a decrease in leverage—liabilities over assets—over the past 80 days in order to select securities and determine their respective weighting in the portfolio.

“Most quantitative ETFs focus on easily available price, volume and earnings data,” Charles Biderman, TrimTabs founder and chief executive, said in a press release earlier this month announcing the two companies’ partnership. “Since data on the supply and demand for stocks is scattered across many sources, most strategies ignore stock market liquidity.”

TrimTabs Asset Management is a unit of TrimTabs Investment Research, a firm known for its expertise in U.S. stock market liquidity.

TTFS will join AdvisorShares’ growing roster of actively managed ETFs, which include:

  • AdvisorShares Dent Tactical ETF (NYSEArca: DENT)
  • AdvisorShares Mars Hill Global Relative Value ETF (NYSEArca: GRV)
  • AdvisorShares WCM/BNY Mellon Focused Growth ADR ETF (NYSEArca: AADR)
  • AdvisorShares Cambria Global Tactical ETF (NYSEArca: GTAA)
  • AdvisorShares Peritus High Yield ETF (NYSEArca: HYLD)

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