FWDB: September 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/etfs/fwdb.

Commentary

FolioBeyond’s algorithmic asset allocation strategy implemented in FWDB returned 1.34% in September in comparison to -0.53% for the Bloomberg Barclays US Aggregate Bond Index (“Index”), retracing the bulk of the underperformance from last month. As Treasury yields retraced part of the historic decline from August, credit products regained favor and outperformed their Treasury benchmarks. During the month, the yield curve steepened marginally as the 10-year Treasury yield rose by 18 basis points while the 2-year yield increased by 13 basis points.

The best performing sector was the mortgage REIT exposure that benefited from relatively stable current income. High yield, short duration corporate bond exposure was flat as spreads narrowed. Municipal credit was marginally negative but still outperformed its Treasury benchmark.  Given the rise in interest rates, the Treasury exposure was the worst performer. The portfolio was rebalanced earlier in the month with a modest increase in the mortgage REIT exposure at the expense of Treasuries and bank loans.

FolioBeyond’s algorithmic approach continues to provide an objective, systematic approach to optimizing ETF-based portfolio allocations to the broader fixed income markets, while maintaining a volatility target similar to the Index.  Please contact us if you would like to discuss how FWDB can fit in with your overall long-term investment goals. 


As of 09.30.2019.

Top Holdings

Ticker Security Description Portfolio Weight %
REM ISHARES MORTGAGE REAL ESTATE 27.07%
SJNK SPDR BBG BARC ST HIGH YIELD 21.02%
HYD VANECK VECTORS HIGH-YIELD MU 20.70%
TLT ISHARES 20+ YEAR TREASURY BOND ETF 9.61%
HYMB SPDR NUVEEN S&P HIGH YIELD M 9.11%
SHYG ISHARES 0-5 YR HY CORP BOND 8.78%
BKLN INVESCO SENIOR LOAN ETF 3.46%

As of 09.30.2019. Cash is not included.

Respectfully,

Yung Lim
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.