The AdvisorShares Athena High Dividend ETF (NYSEARCA:DIVI) uses a behavioral finance approach to identifying global holdings that would fit this smart beta model.
The firm measures behavioral factors of active equity fund investment managers (strategy, consistency and conviction) and identifies stocks which are held in the top relative weight positions of their portfolios; the fund is then dividend weighted while sector, strategy and country diversification are used to reduce fund risk.
"The need for shareholder yield is well known, however, most equity dividend funds focus on dividends first and stock selection second. DIVI aims to provide high yield to investors while taking a patented behavioral approach to stock selection," said Noah Hamman, chief executive officer of AdvisorShares.
The AdvisorShares Athena International Bear ETF (NYSEARCA:HDGI) is the only other fund to utilize a behavioral finance approach to identifying securities; but in its case, to find short positions.
The Adivsor Shares ETF, HDGE, which seeks capital appreciation through short sales of U.S. equities, is placing a bet on the decline of Harley Davidson (HOG).
The actively managed fund is citing the build up of inventories in dealerships, tapering of motorcycle registrations, and premium price of Harley motorcycles as solid signals for an approaching price decline.
Current top short positions in HDGE's actively managed portfolio include Caterpillar CAT, Consolidated Communications CNSL, and Tempur Sealy International TPX.
Launching Friday is the AdvisorShares Athena International Bear ETF (HDGI) - an actively-managed short international equities portfolio with a tactical overlay allocating short and cash exposure. "Short positions are selected from the lowest conviction holdings in the international universe. Equity manager and investor behavior factors also determine the most attractive markets and capitalization ranges." Jul. 15, 2013, 3:51 PM