AdvisorShares Peritus High Yield ETF (HYLD) Earns 5-Star Morningstar Rating™ Continuing to Deliver Actively Managed ETF Innovation
BETHESDA, Md., Jan. 8, 2014 /PRNewswire/ -- AdvisorShares, a leading sponsor of actively managed exchange-traded funds (ETFs), announced today that the AdvisorShares Peritus High Yield ETF (NYSE Arca: HYLD) has been recognized with a 5-Star Morningstar Rating™ for both its 3-year and overall risk-adjusted performances, respectively, from inception through December 31, 2013, out of four ETFs in the high yield bond category.1 HYLD is managed by Santa Barbara, Calif.-based Peritus Asset Management, a value-based active credit manager that specializes in fixed income opportunities in the corporate bond and loan market with a focus on the non-investment grade asset class.
Morningstar compares each ETF's risk-adjusted return, with at least a 3-year history, to the open-end mutual fund rating breakpoints for the High Yield Bond category. Consistent with the open-end mutual fund ratings, HYLD earned its 5-star ranking as being in the top 10% of funds – that includes both ETFs and mutual funds – in the High Yield Bond category.
HYLD seeks to generate a high, tangible current income provided primarily by non-investment grade corporate debt securities with a secondary goal of capital appreciation. With valuation and fundamental analysis an essential component of their strategy, Peritus' portfolio management team takes an active credit approach and concentrates only on the securities they feel offer the best value with the least risk within the company's entire capital structure. Since HYLD largely focuses on seasoned credits and is able to include floating rate loans as a component in the portfolio, its stated duration and maturity tends to be shorter than that of the market indexes, while its actual duration is generally even shorter due to early re-financings and take-outs via calls, poison puts, and tenders. HYLD's active management allows maneuverability to identify securities that the portfolio manager sees as the best opportunities within the high yield space and helps consistently exploit benchmark inefficiencies and deliver alpha for shareholders.
"We are pleased to offer an actively managed ETF with a 5-Star Morningstar Rating™ within a growing and robust marketplace," said Noah Hamman, chief executive officer of AdvisorShares. "This recognition is a testament to Peritus' outstanding portfolio management and as well as that active management in ETFs not only works, but has worked exceptionally well. Representative of the entire AdvisorShares actively managed ETF suite, HYLD exhibits how investors and financial advisors may potentially benefit from a transparent, liquid and efficient solution for their investment goals."
"We appreciate Morningstar's 5-star recognition of HYLD and believe this acknowledgment reinforces that active management is essential in the high yield market," said Tim Gramatovich, chief investment officer of Peritus. "Our extensive expertise in navigating the credit markets for attractive high yield opportunities, along with the ability to be selective in our investment process and not subject to issuance size restrictions faced by index-based products, we feel not only puts us at an advantage, but most importantly benefits our shareholders."
For media inquiries requesting more information on AdvisorShares, please contact Ryan Graham at 202-684-6442 or firstname.lastname@example.org. For financial professionals and investors requesting more information, please visit www.advisorshares.com or call the AdvisorShares Investment Consultant Team at 1-877-THE-ETF1 (1-877-843-3831).
Please visit www.advisorshares.com to register for free weekly economic commentary. For educational insight into the active ETF marketplace, visit www.alphabaskets.com, follow @AdvisorShares on Twitter and 'Like' us on Facebook. Every Thursday at 4:00pm Eastern time, AdvisorShares hosts an educational conference call for Financial Professionals featuring our portfolio managers and leading investment industry experts. This Thursday's call (1/9/14) will feature the HYLD portfolio management team—Dial: 1-800-977-8002; Code: 777534#
AdvisorShares is one of the leading providers of actively managed ETFs. As of 1/3/2014, AdvisorShares offers 18 active ETFs with approximately $1,050,000,000 of assets under management. AdvisorShares provides educational support to help financial advisors and investors understand the benefits of actively managed ETFs and their underlying investment strategies.
About Peritus Asset Management
Peritus Asset Management is a SEC-registered investment advisor headquartered in Santa Barbara, CA. Founders Tim Gramatovich and Ron Heller began their partnership in 1995. Peritus is a value based, active credit investment manager providing services to institutions and retail investors. Please visit www.peritusasset.com for additional information. Additional commentary may be found at www.peritus.com/blog, and by following @PeritusAsset on Twitter.
Before investing you should carefully consider the Fund's investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting the Fund's website at www.AdvisorShares.com. Please read the prospectus carefully before you invest.
An investment in the Fund is subject to risk, including the possible loss of principal amount invested. Non-diversification exposes the Fund to greater market risk than if its assets were diversified among a greater number of issuers and/or sectors. High yield, lower rated bonds involve a greater degree of risk than investment grade bonds in return for higher yield potential. As such, securities rated below investment grade generally entail greater credit, market, issuer and liquidity risk than investment grade securities. Interest rate risk occurs when interest rates rise as bond prices usually fall. This Fund may not be suitable for all investors.
A coupon is the interest rate stated on a bond when it's issued. Take-outs occur when a company decides to take out/refinance the bonds according to a scheduled price; poison puts reference the change of control from merger or buyout activity; tenders are company offers to buy a security at a set price. Duration measures (in years) the sensitivity of the price of a fixed-income investment to a 1% change in interest rates. Credit ratings are published rankings based on detailed financial analyses by a credit bureau specifically as it relates the bond issue's ability to meet debt obligations. The highest rating is AAA, and the lowest is D. Securities with credit ratings of BBB and above are considered investment grade. Alpha is a measure of performance on a risk-adjusted basis.
Shares are bought and sold at market price not net asset value (NAV) and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined) and do not represent the return you would receive if you traded at other times.
1 The Morningstar Rating™ is provided for those exchange-traded funds ("ETFs") with at least a three-year history. Ratings are based on the ETF's Morningstar Risk-Adjusted Return measure which accounts for variation in monthly performance, placing more emphasis on downward variations and rewarding consistent performance. An ETF's risk-adjusted return includes a brokerage commission estimate. This estimate is intended to reflect what an average investor would pay when buying or selling an ETF. PLEASE NOTE, this estimate is subject to change and the actual brokerage commission an investor pays may be higher or lower than this estimate. Morningstar compares each ETF's risk-adjusted return to the open-end mutual fund rating breakpoints for that category. Consistent with the open-end mutual fund ratings, the top 10% of ETFs in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The overall rating for an ETF is based on a weighted average of the time-period ratings (e.g., the ETF's 3,5, and 10 year rating). The determination of an ETF's rating does not affect the retail open end mutual fund data published by Morningstar. Past performance is no guarantee of future results.
Please note, some of the Morningstar proprietary calculations, including the Morningstar Rating™, are not customarily calculated based on adjusted historical returns. The evaluation of this investment does not affect the retail mutual fund data published by Morningstar. For each retail mutual fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a retail mutual fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. This investment's independent Morningstar Rating metric is then compared against the retail mutual fund universe breakpoints to determine its hypothetical rating. The AdvisorShares Peritus High Yield ETF (HYLD) was rated against the following numbers of U.S.-domiciled High Yield Bond funds over the following time periods: 4 funds in the last three years, 3 funds in the last five years, and 0 funds in the last ten years. With respect to these High Yield Bond funds, the AdvisorShares Peritus High Yield ETF (HYLD) received a Morningstar Rating of 5 stars, N/A and N/A stars for the three-year, five-year and ten-year periods, respectively. Past performance is no guarantee of future results.