The AdvisorShares Madrona Domestic ETF (FWDD) has received a five-star Morningstar rating for both its three-year and overall risk adjusted performances from inception through 31 August 2014.
The ETF has been rated out of 1,381 funds in Morningstar’s large blend category.
FWDD is managed by Madrona Funds, an Everett, Washington-based SEC registered investment advisor and asset manager founded by Brian Evans that specialises in domestic equity, international equity and global fixed income strategies.
As more actively managed ETFs begin to reach their three-year track records and beyond, FWDD joins the AdvisorShares Peritus High Yield ETF (HYLD), which is recognised for its three-year and overall risk adjusted performance out of 564 funds in Morningstar’s high yield bond category, as funds from AdvisorShares’ actively managed ETF suite with a five-star Morningstar rating.
Another active ETF managed by Madrona, the AdvisorShares Madrona Global Bond ETF (FWDB), holds a four-star Morningstar rating for its three-year and overall risk adjusted performances from inception through 31 August 2014 out of 294 funds in Morningstar’s World Bond category.
Morningstar compares each ETF’s risk-adjusted return, with at least a three-year history, to the open-end mutual rating breakpoints for each of its respective categories. Consistent with the open-end mutual fund ratings, FWDD earned its five-star ranking as being in the top 10 per cent of funds – including both ETFs and mutual funds – in the large blend category.
“We are pleased to offer another actively managed ETF that has earned a five-star Morningstar rating within an increasingly sought-after actively managed ETF marketplace,” says Noah Hamman, chief executive of AdvisorShares. “Not only is this an acknowledgement of Brian Evans and Madrona’s exemplary portfolio management, but it also reinforces that transparent active management in equity ETFs can work very well with the added benefits of intraday liquidity and overall efficiency of the ETF structure.”
“We certainly appreciate Morningstar’s five-star recognition of FWDD and believe this accolade further supports our belief that qualitative investing will be necessary to take advantage of opportunities in the market moving forward,” says Evans, founder and portfolio manager of Madrona Funds. “Since most index-based domestic equity ETFs allocate their holdings by buying the most of the largest companies without regard to valuation, we feel that FWDD is well-positioned to invest in undervalued opportunities. We believe the forward-looking investment approach employed in FWDD has not only provided a competitive advantage, but most importantly has benefited our shareholders well.”