AdvisorShares Peritus High Yield ETF (HYLD) Surpasses $1 Billion in Assets Continued Innovation Exhibits the Potential Benefits of Active Management in High Yield Investing
BETHESDA, Md., May 14, 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 crossed $1 billion in asset under management. HYLD is managed by Santa Barbara, California-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.
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 $1 billion in investor assets since its December 1, 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," said 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," said 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 3-year and overall risk-adjusted performances, respectively, from inception through April 30, 2014 – out of six ETFs with at least a 3-year track record in the high yield bond category.1 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.
"We've seen increased interest from financial advisors, pension plans and family offices in the high yield market," added 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."
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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 May 9, 2014, AdvisorShares offers 24 active ETFs currently trading with over $1.8 billion 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, California. 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.
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.
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.
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.
 The Morningstar Rating™ is provided for those exchange-traded funds ("ETFs") with at least 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.