Generally as equity markets have weakened in spurts as we have seen in recent sessions, we notice an uptick in activity in an actively managed ETF that is predicated on short-selling individual equity names, HDGE (AdvisorShares Active Bear ETF, Expense Ratio 1.85%).
The fund is not an inverse linked product nor does it incorporate leverage, but the sub-advisor Ranger Alternative Management attempts to identify companies that have “low earnings quality or aggressive accounting which may be intended on the part of company management to mask operational deterioration and bolster the reported earnings per share over a short time period. In addition, the portfolio management team seeks to identify earnings driven events that may act as a catalyst to the price decline of a security, such as downwards earnings revisions or reduced forward guidance,” according to fund literature.
Currently, HDGE’s management team is most bearish the following names: IBM -6.62%, CAT -5.18%, TCK -3.99%, TEX -3.05%, and MON -3.02%.
Even with the fund trading at its lowest levels since inception in November of 2011, it has still attracted $196 million in overall assets under management, including +$23 million just year to date.
AdvisorShares has not stopped at HDGE in terms of actively managed “short” equity offerings, as it also recently launched HDGI (AdvisorShares Athena international Bear ETF, Expense Ratio 1.50%) which kicked off in mid-July of this year. [International Bear ETF]