Active ETF Market Share Update & Weekly Market Review

AdvisorShares Active ETF Market Share Update – Week Ending 7/26/2013

Last week total AUM in all Active ETFs fell by almost $20 million. This was almost entirely due to redemptions in “Foreign Bond” Active ETFs. The “Short Term Bond” category continues to gain assets and increased by $38 million just last week. Total AUM in this category could possibly surpass the “Global Bond” category in the coming months in trends continue. While the “Short Term Bond” category ended with $4,383.7 million in total AUM, the “Global Bond” category finished the week with $4,515.97 million after falling by approximately $16 million over the previous week. Although it much smaller in terms of total AUM ($256.87 million), the “US Equity” category has grown substantially in recent months and increased by $14 million in one week. Other categories seeing significant asset increases include “Alternative Income” and “US Bonds”. Finally, the category of “Currency” Active ETFs declined once again, this week falling by around $3 million.

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Highlights of the Prior week

For the week of July 22 – July 26

Stock Markets

US stock indexes were basically flat for the week; The S&P 500, Russell 2000 and S&P MidCap 400 were all down slightly, while the Nasdaq Composite and the Dow Jones Industrial Average managed slight gains. The beginning of the week started off well as the Dow Jones Industrial Average and the S&P 500 reached new highs, but these gains evaporated by the end of the week as many investors took profits after the past month’s rally. Earnings reports were mixed, but so far this quarter a higher proportion of companies (56%) have beaten revenue estimates. On Thursday, Facebook surged after reporting earnings, as the company was able to significantly increase mobile ad revenue, which has so far been disappointingly low for most internet giants. This helped the Nasdaq end the week higher than where it began. In terms of economic data, manufacturing numbers keep surprising to the upside while housing market data is mixed. US durable goods orders increased by 4.2% in June from the previous month’s levels, almost entirely due to a record $27.7 billion in aircraft orders. The Manufacturing PMI index increased to 53.2, while the Thomson Reuters/University of Michigan Index for consumer sentiment reached a 6 year high of 85.1 for July (it was 84.1 in June). Existing home sales of 5.1 million were below estimates, while new home sales of 497,000 surpassed most expectations and the PHFA home price index increased by 7.3% from the year prior.

Bond Markets

Due to the great durable goods order in the US and better economic news coming out of Europe, demand for US Treasuries decreased and yields rose for all maturities this past week. Prices for Treasury inflation protected securities and most corporate debt also declined. While most high yield corporate debt also fell in price, fund investing in this segment of the bond market continued to see net inflows. Trading in the municipal bond market was very week as many investors are expecting outflows because of news about Detroit’s bankruptcy filing (the largest ever for a US municipality). However, many experts believe that the fiscal situation in Detroit was exceptionally poor and will not be the start of a large wave of municipal defaults. One sector of the US bond market that saw price increases was the leveraged-loan space, or securities with floating rate characteristics, that benefits from rising Treasury yields. Emerging market bonds were mixed for the week. Like the equity markets, they rose early in the week and fell towards the end. One star performer last week was South Korea, whose debt increased in value after the country posted the high GDP growth numbers in 2 years, a 1.1% seasonally adjusted rate for the second-quarter.

Sources:

*Indexes are from Reuters and Yahoo! Finance 4pm closing data

*Gold prices are from EcoWin and J.P. Morgan Asset Management

*Treasury rates are from Bloomberg.com

*Municipal and high yield rates are from Barclays Capital

*30 year mortgage rate comes from the Mortgage Bankers Association (MBA)

Past performance is not indicative of future results.

This document should not be considered investment advice and the information contain within should not be relied upon in assessing whether or not to invest in any products mentioned. This document has been prepared without regard to the individual financial circumstances and objective of persons who received it. The securities discussed in this document may not be suitable for all investors.

This material was compiled by AdvisorShares based on publically available data. AdvisorShares makes no warranties or representation of any kind relating to the accuracy, completeness or timeliness of the data and shall not have liability for any damages of any kind relating to such data.

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