AdvisorShares, the Bethesda, Maryland-based issuer famous for its actively managed suite of funds, expanded its offerings by launching a new product focused on the liquid alternative strategy.
The newly debuted AdvisorShares Sunrise Multi-Strategy ETF (MULT) is managed by Sunrise Capital Partners, a San Diego-based registered investment advisor famous for its quantitative asset management expertise. AdvisorShares now sponsors 25 active ETFs with assets under management exceeding $1.9 billion.
Though Sunrise has been around for nearly 35 years, it has been managing assets of high-net-worth individuals, small family offices, few foundations and bigger institutional-focused Wall Street investors. It presently oversees client assets with products that include a hedge fund and a separately managed account. MULT marks the sub-advisor’s entry into the 1940 Investment Company Act space that governs open-end funds.
The actively managed MULT uses a multi-model, multi-strategy quantitative investment approach by taking tactical (short-term) long and short positions across various asset classes through derivatives, foreign currencies, US Treasuries and ETFs.
The fund employs a systematic algorithm that combines various asset-classes to create very low correlation to stocks and bonds while seeking to remain profitable in any market condition.
The quant investment approach continually assesses over 50 global financial and commodity markets using a wide range of systems that focus on trend following, momentum trading, sector rotation and reversionary patterns. It can go long-short in 15 equity index futures, 13 different currencies and seven separate bond issues.
It can also take tactical long/neutral positions across 11 equity and fixed income ETFs and make five currency cross-rate/pair investments. Exposure in a wide variety of asset classes that have low correlation with the broader economy reduces portfolio volatility.
The new fund’s portfolio is flexible and may include exposure in all the different global markets and asset classes, which could work in its favor when opportunities arise.
However, exposure can be reduced in just a handful markets if required during periods of uncertainty when volatility jumps. To curb downside risks, the fund can systematically convert its holdings into cash, thus providing protection during unfavorable market conditions.
MULT charges 1.89 percent in annual fees.
Disclosure: No holdings
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