We have spoken about Actively managed ETFs in addition to alternative index weightings to “market cap” in recent columns, and this gave us reason to quickly scan the offerings of an ETF provider that is well known for their actively managed offerings, AdvisorShares.
DBIZ (AdvisorShares Pring Turner Business Cycle ETF, Expense Ratio 1.62%) is a relatively unknown ETF that launched in late 2012, and has gathered approximately $5 million in assets under management since inception.
The fund averages about 13,500 shares traded daily, and in spite of trading at an all-time high today, it is safe to say that the fund is still not on many radars and perhaps some portfolio managers and ETF strategists have not dug very deep into what DBIZ actually does.
The fund is classified as “Multi-Asset” as well as “Multi-Cap” and it also provides global exposure. A firm named Pring Turner Capital Group, according to fund literature “dynamically allocates among stocks, bonds, inflation-sensitive securities, and cash” and “has developed a pro-active asset allocation and sector rotation process designed around the stage changes in the business cycle.
DBIZ’s disciplined decision-making employs multiple layers of input including business cycle, fundamental, and technical analysis.” At first glance, we can say that the fund is unique at least in its intended design in its focus on the “business cycle,” as this is an ETF first, and what interests us is the usage of both fundamental as well as technical analysis, being the technicians that we are.
Like other AdvisorShares offerings, DBIZ makes use of other ETFs within its investment methodology, and we see current top holdings listed (outside of its number one holding which appears to be a “non ETF product,” but a Dreyfus Government Cash Managed fund at 11.42%) as HYLD (Peritus High Yield, Expense Ratio 1.25%, 4.66% weighting, BSJF (Guggenheim BulletShares 2015, Expense Ratio 0.42%, 4.43% weighting), BKLN (PowerShares Senior Loan, Expense Ratio 0.65%, 4.37% weighting), TLT (iShares 20+ Year Treasury Bond, Expense Ratio 0.15%, 3.35% weighting) and a stock, ERF (Enerplus Corp., 3.11% weighting).
The usage of a multitude of products including both listed stocks and ETFs, some of which mentioned above are shunned by some advisors for perceived “illiquidity” is admirable here, and it shows the progression of the industry.
HYLD for example is a fund that we have profiled here on several occasions since its December 2010 launch that for at least some time period, was considered by unfortunate flawed popular convention, too thinly traded or “small” to establish institutional sized positions in.
This of course proved not to be true, and the fund is an unabashed winner in the active camp, raising more than $1 billion since its inception putting it at number six in terms of all High Yield Corporate Bond ETFs in the U.S. landscape in terms of asset levels.
Fast forward the calendar less than four years, and now we see HYLD not only being used as a standalone, but also as part of the investment methodology of DBIZ, another actively managed ETF, at this juncture. These kind of findings keep us ever fascinated in the space as things are rarely standing still.
AdvisorShares Pring Turner Business Cycle ETF
For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.
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