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(ACT) AdvisorShares Vice ETF

Overview

How the AdvisorShares Vice ETF Works

    Diversification stands among the most important attributes of an investment portfolio. While finding true negative or non-correlation among investments remains challenging, building a diversified portfolio during a normal market environment can allow an easier path. Recessions represent a natural and cyclical part of markets. Consumer spending slows significantly during recessionary environments: no new cars, less retail purchases and generally less of everything. However, even in the toughest economic environments, people still historically spend on their leisure, habits and vices. Alcohol and tobacco have been often viewed as recession-proof areas simply because individuals take pleasure in such related activities during both good times and bad times.
    The investment thesis of the AdvisorShares Vice ETF (Ticker: ACT) believes that investing in select alcohol and tobacco companies will provide continued growth and long-term performance across all types of market environments. Coupled with the continuing societal acceptance and regulatory approvals of cannabis across jurisdictions, a new investment avenue has emerged that provides a compelling upside to complement the steady and more predictable returns of the coined recession-proof equities.

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Why Invest in ACT

  • Steady, Predictability Complemented by Upside Potential - Alcohol and tobacco provide a long, established history of delivering all-weather, predictable returns in the equity markets. The emergence of cannabis-related companies and their significant growth potential adds a compelling element to an investment theme particularly resistant to market drawdowns and recessionary environments.
  • Alcohol and Tobacco Possess Highest Profit Margins Among Consumer Products - Tobacco products still possess the highest profit margins of any consumer product despite less people smoking and heavily restricted advertising. Alcohol-related companies are also known for providing some of the largest profit margins among consumer products.
  • Only ETF with Concentrated Exposure to Emerging Investment Theme - ACT is the only ETF, including passively managed strategies, that provides concentrated exposure to select companies associated with alcohol, cannabis and tobacco. The fully transparent ETF structure delivers this emerging investment theme with intraday liquidity as well as enhanced operational and tax efficiency for its shareholders.
  • Experienced Portfolio Management Expertise - ACT’s portfolio management team carries extensive experience in the capital markets and a well-established expertise of investing in this area of the equity markets, including as the original portfolio manager of the Vice Fund mutual fund and managing other well-regarded investment strategies.

Where Does ACT Fit in a Traditional Portfolio?

  • ACT can deliver an alpha-seeking complement or satellite equity holding to a broad-based equity allocation. ACT provides direct exposure to select leaders within the alcohol and tobacco industries complemented by the emerging upside of cannabis-related companies.

Key Attributes

  • Durable Moat Advantage - Select alcohol and tobacco companies can carry a competitive advantage operating within heavily regulated industries, reinforced by a well-established record of exemplary performance across multiple market and economic environments.
  • Equity Market’s Best Dividend Payers - The largest alcohol and tobacco companies are among the equity market’s best dividend payers, exhibiting a strong history of consistent growth and increasing dividends that can enhance the portfolio’s total return.
  • Untapped Emerging Growth Opportunity - Cannabis-related equities span across multiple industries including agriculture, biotechnology, pharmaceutical, real estate, retail, finance and other medical applications. The portfolio manager believes that continued regulatory advancements and societal acceptance of cannabis across its various formats provides tremendous upside potential that could lead to significant growth.
  • Merger & Acquisition Potential - Due to its emerging overall growth, companies involved in cannabis-related business could also benefit from significant merger and acquisition activity as the cannabis market matures and regulations evolve.

About the Portfolio Manager

    Dan Ahrens
    Dan Ahrens is managing director and chief operating officer of AdvisorShares. Dan carries over two decades of experience in the financial services industry serving in a variety of senior-level capacities. He founded Ahrens Advisors, L.P., an SEC-registered investment advisor, where he was portfolio manager of the Ladenburg Thalmann Gaming and Casino Fund. Dan also served as president of the MUTUALS.com Funds, where he launched the Vice Fund (VICEX) and served as its original portfolio manager. He was also the portfolio manager of the Generation Wave Growth Fund (GWGFX). During that time, he was also president and chief compliance officer of Mutuals Advisors, Inc, and acted as president, treasurer and financial & operations officer of an affiliated broker dealer firm. Dan is the author of “Investing in Vice” (St. Martin’s Press, 2004) and has appeared prominently across financial media outlets and major national and trade publications. He earned a Bachelor in Business Administration in Finance from Texas Tech University.
    Robert M. Parker, CFA
    Rob Parker is the director of capital markets for AdvisorShares, where he oversees trading, portfolio management and fund operations activity for the firm. Rob’s professional career has spanned over a decade and a half within the financial services industry, where he has worked across compliance, due diligence, and investment analysis as well as positions of senior portfolio manager and firm principal. Rob managed assets for a proprietary investment practice that he created after serving as senior portfolio manager at ProShares Advisors, where he managed leveraged, inverse, and long-short ETFs. Rob previously held positions held at Capital Financial Group, Wachovia Securities, The Advisors Group, and FOLIOfn, serving in a variety of analyst roles. He is a graduate of National University, earning a Bachelor of Science. He holds the Chartered Financial Analyst (CFA) designation and is a member of the CFA Society of Washington, DC.
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Manager Minutes, November 2017

Price History

As of: 12/12/2017
NAV$24.95Closing Price$0.00
Change$24.95Change$0.00
Shares Outstanding100,000Volume0
4PM Bid/Offer Midpoint$0.00Premium/Discount$0.00
Assets Under Management$2,494,731.40
Premium/Discount Historical Data

Holdings

As of: 12/12/2017

 

Fund Basics

  • Symbol

    ACT

  • Exchange

    NASDAQ

  • Inception Date

    12/12/2017

  • CUSIP

    00768Y545

  • Indicative Value

    ACT.IV

  • Options

    No

Fees & Expenses

  • Management Fee

    0.60%

  • Other Expenses

    0.31%

  • Gross Expense Ratio

    0.91%

  • Fee Waiver and/or Expense Reimbursement

    0.16%

  • Net Expense Ratio

    0.75%*

  • *The Advisor has contractually agreed to reduce its fees and/or reimburse expenses to keep net expenses from exceeding 0.75% of the Fund’s average daily net assets for at least one year from the date of the Prospectus.