On March 15, AdvisorShares made a filing with the SEC which provided specifics and expense details on the proposed Meidell Tactical Advantage ETF (NYSEARCA:MATH). MATH will be a fund-of-funds that will look to achieve long-term capital appreciation by investing in other ETFs that provide exposure to various regions, countries, styles and sectors.
The fund will be sub-advised by American Wealth Management, which will manage the fund using a quantitative tactical strategy involving dynamically rebalancing the portfolio between an equity allocation and fixed-income or cash. MATH will be a long-only fund and its main value add will be provided by rotating out of higher volatility assets into lower volatility assets in times of market stress.
MATH will charge investors a net expense ratio of 1.60%, which is definitely on the high side for ETFs but something that has come to be expected of AdvisorShares’ product offerings. In fact, the fund’s total operating expenses are actually 2.20% and are only capped at 1.60% thanks to a fee waiver of 0.60% that has been contractually agreed upon and will be in place until Oct 31, 2012.
American Wealth Management is a Reno, Nevada-based asset manager that was established in 1989 and had $211 million of assets under management as of March 2011. The advisory fee that the sub-advisor will be receiving from AdvisorShares is 0.70%. Laif Meidell will be the portfolio manager of MATH and has been with the firm since 1995.
MATH also has a distribution plan in place that will allow the fund to pay a maximum of 0.25% in fees to the distributor and other firms that provide distribution services.
Disclosure: No positions in above-mentioned names.
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