FWDB: April 2019 Portfolio Review
Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. Returns less than one year are not annualized. For the fund’s most recent standardized and month-end performance, please click www.advisorshares.com/fund/fwdb.
Using FolioBeyond’s automated asset allocation strategy, FWDB generated returns of +0.55% in April in comparison to +0.03% for the Bloomberg Barclays US Aggregate Bond Index (“Index”), outperforming the Index by 52 basis points. AGG, which is the largest passive ETF that tracks the Index, returned -0.20% in the same time period.
The Treasury market sold off marginally during the month, with the 10-year Treasury yield rising by 9 basis points. Shorter Treasuries, however, were virtually unchanged with the 2-year Treasury yield rising by 1 basis point. This led to a steepening of the yield curve. Credit spreads narrowed in various sectors of the market as volatility levels subsided. Implied volatility tied to 1-year swap rates declined by approximately 20% relative to historical levels.
The major drivers of positive returns for FWDB were bank loans, followed by short-dated high yield corporate bonds. Credit sensitive municipal bond exposure also contributed to positive returns. Long-term Treasuries detracted from returns as long-term yields rose modestly.
There were no changes to the portfolio during the month as would typically be the case in benign environments where relative value relationships do not change materially. The models used by FWDB, however, are generating the optimization results daily based on up-to-date market prices and analytical measures. This allows us to efficiently manage portfolio allocations and produce an alpha maximizing core bond strategy that is nicely packaged in FWDB’s fund of ETFs format. Please contact us or AdvisorShares if you have additional questions regarding the use of this product within your portfolio.
|Ticker||Security Description||Portfolio Weight %|
|BKLN||INVESCO SENIOR LOAN ETF||27.07%|
|SJNK||SPDR BBG BARC ST HIGH YIELD||21.09%|
|HYD||VANECK VECTORS HIGH-YIELD MU||21.05%|
|TLT||ISHARES 20+ YEAR TREASURY BOND ETF||13.04%|
|SHYG||ISHARES 0-5 YR HY CORP BOND||9.04%|
|HYMB||SPDR NUVEEN S&P HIGH YIELD M||9.02%|
As of 04.30.2019.
CEO of Folio Beyond
AdvisorShares FolioBeyond Smart Core Bond ETF (FWDB) Research Strategist
Past Portfolio Commentary
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 www.advisorshares.com. Please read the prospectus carefully before you invest. Foreside Fund Services, LLC, distributor.
There is no guarantee that the Fund will achieve its investment objective. An investment in the Fund is subject to risk, including the possible loss of principal amount invested. ETNs have a maturity date and generally, are backed only by the creditworthiness of the issuer. The value of an ETN may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in the underlying market (e.g., the commodities market), changes in applicable interest rates, and changes in the issuer’s credit rating and economic, legal, political or geographic events that affect the market. Other Fund risks include market risk, equity risk, early closing risk, liquidity risk and trading risk. The Fund will be subject to the risks associated the Underlying ETFs’ or ETP’s investments such as commodity risk, concentration risk, credit risk, fixed income risk, high yield risk, income risk, interest rate risk, and investment risk.
Shares are bought and sold at market price (closing price) not 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.
Holdings and allocations are subject to risks and to change.
The views in this commentary are those of the portfolio manager and may not reflect his views on the date this material is distributed or anytime thereafter. These views are intended to assist shareholders in understanding their investments and do not constitute investment advice.