Active ETF Market Share Update & Weekly Market Review

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AdvisorShares Active ETF Market Share Update – Week Ending 8/16/2013

Last week, total AUM in all active ETFs fell by over $60.5 million. AUM in the “Global Bond” category fell by nearly $89 million both because of falling values for ETFs in the category and redemptions in certain ETFs. The “Foreign Bond” category had another bad week, ending almost $36 million below where it began. As in previous weeks, assets in “Short Term Bond” active ETFs increased, this time by almost $36.5 million. Some of the smaller categories had big increases in assets considering their smaller beginning asset base. The “Alternative Income” category had an increase of over $30 million (finishing at $1,120,739,543.60), while the active ETFs in the “High Yield” space gained over $10.25 million in total AUM (ending at $337,213,976.44). Other notable changes were a decrease of over $2.85 million in “Currency” active ETF AUM and a decline of nearly $4 million in “Alternative” active ETFs, mainly due to redemptions in a particular fund in this category.

Highlights of the Prior week

For the week of August 12 – August 16

Stock Markets

Despite the release of more positive indicators about the state of the economy, US stock market indices ended lower for the second week in a row. The first pieces of good news came on Tuesday, when the NFIB small business optimism index increased for July and retail sales numbers rose 0.2% for the same month. The S&P 500 experienced its biggest daily decline in two months on Thursday, but the selloff was actually caused by good US economic data. The Labor Department’s numbers for weekly jobless claims fell to 320,000 or the lowest level since October of 2007. However, investors are focused on interest rates and the Federal Reserve so this data caused investors to fear that the Fed would feel economic conditions are ripe for ending its large asset purchasing program. Another factor that may lead the Fed to consider tightening monetary policy is that core inflation rose to 1.7% (and the headline CPI rose 2.0%) for the 1 year period ending July 31st. While industrial production was flat in July and the manufacturing component actually fell 0.1%, the Empire State Manufacturing Survey1 reached a 16-month high as plans for capital expenditures rose 14.3%. Hopefully, this indicated that manufacturing activity will pick up later in the year. On Friday, housing starts data was released for July and the number of starts increased by 5.9% to an annualized rate of 890,000, after experiencing a 7.9% drop in June. Despite declining for two consecutive weeks, the S&P 500 is only 3.1% below the record level it reached on August 2nd. Stock markets in the rest of the developing world fared better last week, as the MSCI EAFE only fell 0.07% and most indices in Europe increased for the week. The recession in the Euro-zone is officially over, as GDP for the Euro-area as a whole grew slightly in the second quarter of 2013.

Bond Markets

The good US economic data caused a sell-off in the Treasury market and the 10-year Treasury yield reached its highest level in over 2 years. Higher interest rates seem to be having an effect on the consumer as the Thomson Reuters/University of Michigan consumer sentiment index fell sharply from its July levels, probably in large part due to rising mortgage rates that consumers face. Prices for municipal bonds also fell as mutual funds that invest in the space have continued to experience net outflows. Although investment grade corporate bonds fell in price, there was strong demand for new issues and many deals were oversubscribed. Prices for high yield corporate bonds also fell, although there is relatively little trading in this asset class in August. High yield bonds issued by US airlines were especially hard hit, after the Department of Justice attempted to stop the merger of American Airlines and US Airways. Emerging market debt had a bad week, largely because turmoil in Egypt caused investors to avoid the space. Of the countries that reported second quarter GDP growth numbers last week, Singapore and the Czech Republic surpassed estimates, while Peru and Romania fell short of them.


*Index information is from Reuters and Yahoo! Finance 4pm closing data

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

*Treasury rates are from

*Municipal and high yield rates are from Barclays Capital

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 securities or asset classes mentioned. This document has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The securities discussed in this document may not be suitable for all investors.

This material was compiled by AdvisorShares Investments, LLC (“AdvisorShares”), an SEC-registered investment adviser and was based on publically available data at the time of compilation. 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 the use such data. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.

The indices included herein are unmanaged indices and one cannot directly invest in an index. Index returns do not reflect the impact of any management fees, transaction costs or expenses. The index information included herein is for illustrative purposes only.

There are risks involved with investing in ETFs, including possible loss of principal. Shares are actively managed and are subject to risks similar to stocks, including those related to short selling and margin maintenance. Ordinary brokerage commissions apply.

Shares are not individually redeemable and owners of the shares may acquire those shares from the Funds and tender those shares for redemption to the Funds in Creation Unit aggregations only, typically consisting of 50,000 shares.

AdvisorShares® is a registered trademark of AdvisorShares Investment, LLC. The trademarks and service marks contained herein are the property of their respective owners..

1 Source: Bloomberg as of 8/15/2013

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