Back in August we profiled AdvisorShares Active Bear ETF (NYSEArca: HDGE) and its impressive breakout performance at the time as the equity markets began their swoon. [ETF Chart of the Day: HDGE]
As a refresher, HDGE is structured as an actively managed exchange traded fund, and the fund’s advisor Ranger Alternative Management L.P. employs a “bottom-up, fundamental, research driven security selection process.” [ETF Spotlight: Bear Fund]
The fund’s advisor seeks short exposure to equities that are believed to have low quality earnings or are utilizing aggressive accounting methods within their operations and the fund will sell short shares of such companies after they are identified.
The last time we highlighted HDGE, top short positions in the fund were made up of VMC, SFB, COL, MDSO, and WHR. Currently, the top five short holdings are OPEN, CRM, HBI, MDSO, and ACM.
Clearly, the fund managers are constantly adjusting their positions in the fund, and based on the impressive returns of the ETF, are clearly profitably closing out a number of these short positions as the shares fall in value (such as VMC and WHR for example) which we note are no longer among the top positions in the fund.
Year to date, HDGE is up 1.8% versus the S&P 500 losing 3.49%. In the past month, the equity markets have obviously rallied off of their early October lows, and HDGE has lost some ground, down 10.10% versus the S&P 500 gaining 9.56%.
HDGE may appeal to those portfolio managers who are approaching the recent rally in equities cautiously, and may want to build some fundamentally based short exposure into their portfolios in the event that this rally falters.
AdvisorShares Active Bear
For more information on Street One ETF research and ETF trade execution/liquidity services, contact pweisbruch@streetonefinancial.com.