AdvisorShares, a sponsor of actively managed exchange-traded funds (ETFs), has launched the AdvisorShares Focused Equity ETF (CWS) on the NYSE Arca.
CWS is managed by Edward (Eddy) Elfenbein, founder of the financial research and investment analysis outlet Crossing Wall Street, whose annual "Buy List" has gained prominence for its decade-plus history of selecting a concentrated, high-quality portfolio of stocks.
In pursuing its investment objective, CWS seeks long-term capital appreciation, and does so by investing primarily in a focused group of US exchange-listed equity securities that the portfolio manager believes possesses favourable fundamental attributes.
Based on the same tenets of Crossing Wall Street's annual Buy List, CWS employs a disciplined bottom-up investment approach that focuses on companies with strong balance sheets and consistent operating histories that feature steadily growing sales, earnings and dividends.
With a focus towards value, the portfolio manager purchases high-quality stocks at the lowest possible prices, and additionally aims to reduce risk during broad-based market declines. CWS is also designed to avoid market overreactions with its long-term investment horizon and commitment to a low turnover portfolio, which typically only replaces one-fourth of its 20 underlying holdings each year.
The operational and tax efficiencies provided by a fully-transparent ETF structure also help reduce underlying trading costs and aim to eliminate annual capital gains distributions for shareholders. CWS features a fulcrum fee expense structure that aligns portfolio manager incentive with shareholder interests. The expense ratio will adjust according to the fund's performance, which is an ETF industry first.
"We strive to deliver attractive alpha-seeking solutions through the best investment technology available, which we believe fully-transparent ETFs represent," says Noah Hamman, chief executive officer of AdvisorShares. "The reputation of Eddy Elfenbein and Crossing Wall Street's Buy List has long been reinforced by his strong investor following and a well-established history. We're pleased to now deliver that expertise through an actively managed ETF and provide another industry first, where the portfolio manager is compensated relative to CWS' performance against its S&P 500 benchmark."
"My ultimate goal has always been to show investors that a simple strategy of buying and holding great stocks not only can be very profitable over the long-term, but can beat the broader market averages with potential ease," says Elfenbein. "I believe that advisors and investors alike after conducting their due diligence will discover CWS to be an attractive core equity allocation to consider – and one of high-conviction that is reflected both through a concentrated, high-quality stock portfolio and the unique fulcrum component that lets shareholders know that I have skin in the game too."