Active ETF Market Share Update & Weekly Market Review

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AdvisorShares Active ETF Market Share Update – Week Ending 9/6/2013

Last week, total AUM in all active ETFs increased by around $38.2 million. As in previous weeks, assets in “Short Term Bond” active ETFs increased, this time by almost $61.7 million, while AUM in the “Global Bond” category fell by about $39 million. The “Global Bond” category had another bad week, ending over $18.3 million below where it began. The “Alternative Income” category increased again but by less than in previous weeks; AUM increased by nearly $4.26 million. The “Alternative” active ETF category’s AUM rose by approximately $2.79 million. Unlike previous weeks, the “Currency” category saw an increase in value, by about $2.5 million for the week, as certain emerging market currency ETFs had creation units. Finally, the categories of “High Yield” and “US Equity” grew at $2.7 million and over $3.5 million respectively.

Highlights of the Prior week

For the week of September 2 – September 6

Stock Markets

Most of the major US stock indexes finished higher over the course of the four day trading week that began after Labor Day. Growth stocks experienced larger gains than value stocks, while small-cap stocks performed better than large cap stocks. The week started off well on Tuesday, after the Institute of Supply Manager’s PMI index came in higher than expected for August (the new orders component was the biggest surprise) and data showed construction spending increased by 5.2% from the previous year in July. On Wednesday, vehicles sales increased to an annualized pace of 16.1 million cars, marking a new post-financial crisis high. Thursday brought even more good news, as the Institute of Supply Manager’s services index showed an even faster rate of growth than Tuesday’s manufacturing report and ADP’s employment report showed an increase of 176,000 private sector jobs. On Friday, the Labor Department’s employment report not only showed that a lower than expected job growth number for August (169,000 jobs), but also lowered its estimates of employment gains for previous months. While the market initially fell on the news, investors shrugged it off later in the day as many hoped that it would prompt the Fed to delay its tapering of asset purchases. Also, a closer look at the report doesn’t point to a slowing economy, as certain data points like hourly earnings have been experiencing higher than expected growth. The unemployment rate fell from 7.4% to 7.3% (lowest level since late 2008) but largely because discouraged workers were leaving the labor force.

Bond Markets

In the bond markets, prices for US Treasuries declined, while the 10-year note hit a yield of over 3% at one point in overnight trading. One the best performing fixed income sectors for the week was the bank loan segment. In recent months, funds investing in bank loans have attracted large inflows of assets in large part because bank loans have floating rates that reduce interest rate sensitivity. The US high yield bond market also performed well, even as Treasury prices declined. Most emerging market debt fell in value over the course of the week as worries over a US attack on Syria scared investors away from the sector. Finally, the week saw a lot of activity in investment corporate debt issuance ($18 billion by Wednesday morning) because of several large merger and acquisition deals that have taken place recently.

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

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 objectives 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.

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 Investments, LLC. The trademarks and service marks contained herein are the property of their respective owners.

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