AdvisorShares, a sponsor of actively managed exchange-traded funds (ETFs), has lowered the total net expense ratio of the AdvisorShares Dorsey Wright ADR ETF (AADR) to 0.99 per cent, by contractually agreeing to reduce the fund’s expense limitation from 1.25 per cent to 0.98 per cent.
The actively managed AADR recently surpassed USD150 million in assets under management, which has allowed a significant reduction in the ETF’s operating expenses as it has become more operationally-efficient. AADR carries a five-star Morningstar rating for its overall risk-adjusted performance and ranks among the top-performing international equity strategies among both mutual funds and ETFs.
Dorsey, Wright & Associates (DWA), a Nasdaq company, serves as the portfolio manager of AADR. AADR’s investment approach adheres to DWA’s core philosophy of relative strength investing, which involves buying securities – domestically-traded American depositary receipts (ADRs) – that have appreciated in price more than other securities within its investment universe and holding those ADRs until they sufficiently underperform. AADR’s systematic investment process refrains from using fundamental company data and is based entirely on the market movement of international companies, which measures current sector and industry group allocations to maintain diversification within its portfolio. While no consideration is given to developed and emerging markets, AADR will allocate between the two depending on global price trends. AADR delivers a concentrated underlying portfolio ranging from 30-50 equities that demonstrate favourable relative strength characteristics.
“As we have always said, you can deliver benchmark beating performance in a transparent actively managed strategy, and AADR has proven this,” says Noah Hamman, chief executive officer of AdvisorShares. “The increasing demand for AADR has provided an opportunity to lower its total net expense ratio, and we expect with continuous growth that the total expense ratio will continue to lower over time. We especially feel that the full transparency, intraday liquidity, operational and tax efficiencies that the ETF structure provides makes AADR that much more of a compelling investment strategy to consider.”