On July 21st, two more actively-managed ETFs began trading, one in the US and one in Canada.
AdvisorShares’ long-awaited WCM/BNY Mellon Focused Growth ADR ETF (AADR) debuted on the NYSE and became the first Active ETF to focus on a portfolio of American Depository Receipts (ADRs), which are the US-listed shares of a non-US company. This came just a few days after AdvisorShares’ also brought to market the Mars Hill Global Relative Value ETF (GRV).
The Focused Growth ADR ETF will look to achieve capital appreciation and beat benchmarks such as the MSCI EAFE and the BNY Classic ADR Index. The fund is sub-advised by WCM Investment Management, which currently has $1.4 billion in AUM has historically achieved quite a stellar performance on its international portfolios. The prospectus provides the performance of a “Focused Growth International Composite,” which represents 12 accounts managed by WCM with similar objectives, policies, strategies and risk to those of AADR. This composite has outperformed the MSCI EAFE benchmark in every period, including since inception (12/1/2004) by 7.55%.
Another important point to note is that this fund is relatively concentrated in its holdings, with the portfolio managers aiming to hold just 20-30 securities which focus on the technology, health care and consumer staples sectors. AADR will have a total MER of 1.25%, which includes a management fee of 0.75%. Some of its top holdings on the first trading day included China’s Baidu.com (BIDU), Walmart’s Mexican division (WMMVY.PK) as well as Nestle (NSRGY.PK).
Disclosure: No positions in above-mentioned names.
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