Actively-managed exchange-traded fund sponsor AdvisorShares’ Peritus High Yield ETF (HYLD) has crossed USD1 billion in asset under management.
HYLD is managed by Santa Barbara, California-based Peritus Asset Management, a value-based, active credit manager that specialises in fixed income opportunities in the corporate bond and loan market with a focus on the non-investment grade asset class.
Rooted deeply in valuation and fundamental analysis, Peritus takes an active approach and concentrates only on high-yielding securities that they believe offer the best value while assessing the risk profile within a company’s entire capital structure.
Since HYLD focuses largely on seasoned credits with the ability to include floating rate loans and high yield equities within its portfolio, its stated duration and maturity tends to be shorter than that of the market indexes.
The resulting portfolio has attracted more than USD1 billion in investor assets since its 1 December 2010 launch, while striving to deliver a high, tangible income with capital appreciation as a secondary goal.
“This is further testament that active management not only works in a fully-transparent ETF, but can work very well,” says Noah Hamman, chief executive officer of AdvisorShares. “Peritus has exhibited that their fundamental value-based approach to high yield can serve as an attractive part of a diversified investment portfolio, and if one looks at investor dollars as a form of voting, HYLD’s performance and growth reinforces that.”
“When it comes to leveraged finance assets, we firmly believe traditional indexing just doesn’t work well,” says Tim Gramatovich, chief investment officer of Peritus. “HYLD’s performance proves how investors can benefit from active management. Deep credit analysis is key to determine not only what to own but also what to avoid.”
HYLD carries a 5-Star Morningstar Rating for both its three-year and overall risk-adjusted performances, from inception through 30 April 2014. HYLD earned its 5-star ranking as being in the top 10 per cent of funds – that includes both ETFs and mutual funds – in the high yield bond category.
“We’ve seen increased interest from financial advisors, pension plans and family offices in the high yield market,” says Ron Heller, managing partner of Peritus. “Historically low interest rates continue to hurt yield investors, and we feel that the market has come to understand that high yield bonds and leveraged loans are incredibly efficient in an active ETF structure. I’m tremendously proud of the team at Peritus and the great work they continue to do.”
