AdvisorShares, the exchange traded funds issuer known for its lineup of all actively managed ETFs, is throwing its hat into the ultra-low duration ring with the introduction of the AdvisorShares Sage Core Reserves ETF (NYSEArca: HOLD).
HOLD is sub-advised by Texas-based ETF Strategist Sage Advisory Services. Sage seeks to make the ultra-low duration portfolio less sensitive to interest rate changes, and provide the ability to be flexible across credit quality and security selection, while minimizing volatility and maintaining a high level of liquidity, according to a statement issued by AdvisorShares.
After 10-year Treasury yields jumped nearly 130 basis points last year and with those yields expected to climb higher in 2014, ETF issuers are meeting investors’ demands by bringing an increasing number of low and ultra-low duration products to market. Duration is a measure of a bond’s sensitivity to interest rate changes. [ETFs for Rising Rates Protection]
Sage uses a top-down approach to focused on active management of duration risk, yield curve positioning and security allocation and selection.
“We believe our unique top-down portfolio management approach, which focuses across a diverse range of fixed income securities, is well-positioned to manage risk and duration in any market or interest rate environment,” said Robert G. Smith, president and chief investment officer of Sage, in the statement. “As a result, we believe our partnership with AdvisorShares can present HOLD shareholders a core portfolio component to help realize their investment goals.”
HOLD has an annual expense ratio of 0.35%.
Well-known AdvisorShares ETFs include the AdvisorShares Peritus High Yield ETF (NYSEArca: HYLD) and the AdvisorShares Ranger Equity Bear ETF (NYSEArca: HDGE). HYLD recently landed the prestigious five-star rating from Morningstar. [High-Yield ETF Garners Five-Star Rating]
ETF Trends editorial team contributed to this piece.