DoubleLine Replaces Wilshire As Sub-Advisor At Revamped AdvisorShares ETF
AdvisorShares did a wholesale makeover of one of its equity exchange-traded funds that included a new investment mandate and a new sub-advisor. In October, the Bethesda, Md.-based provider of actively managed ETFs changed the name of the AdvisorShares Wilshire Buyback ETF (TTFS) to the AdvisorShares DoubleLine Value Equity ETF (DBLV).
As part of the switch, DoubleLine Equity LP replaced Wilshire Associates as the fund’s sub-advisor. DoubleLine Equity is an affiliate of DoubleLine Capital LP, an investment management firm led by CEO Jeffrey Gundlach. While the firm is noted for its fixed-income expertise, it also oversees a sizable equity portfolio. The revamped AdvisorShares fund, which retained its net expense ratio of 0.90%, aims to hold a concentrated portfolio of 35 to 50 positions of both classic value and quality value stocks.
Redefining Value Investing
Distillate Capital’s name conjures images of petroleum distillates, but its first ETF takes a customized approach to value investing. The Distillate U.S. Fundamental Stability & Value ETF (DSTL) follows a rules-based index created by the Chicago-based asset manager that screens the 500 largest U.S. companies by market cap to eliminate those with less than five years of cash-flow-per-share data.
The remaining companies are evaluated on three proprietary fundamental measures: their financial indebtedness, their fundamental stability and their projected cash flows. Distillate believes its proprietary cash-based measure, called “distilled cash yield,” offers a consistent gauge of valuation by allowing a comparison of older, more physical-asset based companies with newer, more R&D-oriented ones. The fund, which holds roughly 100 companies, charges 0.39%.
Global X Launches Suite Of China ETFs
In the midst of trade war worries late last year, Global X debuted six China ETFs —five sector-focused products and the Global X MSCI China Large-Cap 50 ETF (CHIL)—that aim to provide investors with more flexibility in investing in the world’s second-largest economy.
Despite the headline worries, Global X believes it’s a good time to launch China-focused ETFs because all of the talk about slowing global growth, increasing political tension and trade wars drives a wedge between the returns of different sectors in China. “The whole thesis behind sector investing is that these stocks don’t trade as one,” said Jay Jacobs, head of research and strategy at Global X Funds.
The five new sector ETFs comprise the following: