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Step 2: Create Long and Short Portfolio Models AGA analyzes a broad range of approximately 40 factors in four major groups. Factors selected for the model are based on historically successful investment strategies and are consistent with economic theory. Focusing on multiple factors instead of a single set of factors may minimize risk during times of extended market moves in one direction or another. Examples of these key factors include but are not limited to:
Fundamentals
Economic Growth Earnings
ACCU
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Step 3: Rank countries based on relative attractiveness Using a weighted average scoring system, the factor scores are combined to create a final country score. Based on the country scores, the entire universe of countries is ranked from most attractive to least attractive.
Fundamentals
Momentum
Risk
Valuation
Country Risk
More Attractive (Higher Scores)
Country A Country B Country C Country D 1 2 3 4
Step 4: Construct the ACCU portfolio Finally, ACCUs completely benchmark agnostic portfolio is constructed by purchasing single-country ETFs of the most highly ranked 5-6 countries in the country ranking model. Position sizes are created using a proprietary algorithm; however there is portfolio constraint that no position can receive more than a 25% portfolio allocation when purchased.
Country Ranking
Portfolio Constraints
Top 5- 6 Countries
ACCU
Before investing you should carefully consider the Funds investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting the Funds website at 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. Diversification and asset allocation do not guarantee a profit, nor do they eliminate the risk of loss of principal. The Fund is subject to the risks associated with the underlying ETFs that comprise the fund of funds. Each underlying ETF is subject to geographic concentration risk, emerging market risk, political and economic conditions, and changes in regulatory, currency exchange rates, tax or economic policy which could have a negative effect on the underlying ETFs performance. See prospectus for specific risks regarding each geographic region. Newly organized, the Fund has no trading history and there can be no assurance that active trading markets will be developed or maintained. The MSCI AC World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. Volatility is a statistical measure of the dispersion of returns for a given security or market index. Mean Reversion is a theory that suggests that prices and returns eventually move back towards the mean or average. Absolute Valuation uses discounted cash flow analysis to determine a companys financial worth. Relative Valuation compares a firms value to that of its competitors to determine the firms financial worth.
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