(QEH) QAM Equity Hedge ETF

Overview

How QEH Works

The AdvisorShares QAM Equity Hedge ETF (QEH) seeks investment results that exceed the risk adjusted performance of approximately 50% of the long/short equity hedge fund universe as defined by the HFRI Equity Hedge Total Index constituents. QEH is managed by Commerce Asset Management (“Portfolio Manager”).

The Portfolio Manager seeks to achieve the objective by employing an actively managed long/short equity strategy that attempts to gain global net equity exposures that approximate those of the universe of managers in the HFRI Equity Hedge Total Index. Additionally, the Portfolio Manager, utilizes advanced algorithms including Markov Processes International’s (“MPI”) proprietary and patented style analysis technique and associated algorithms, DSA (“Dynamic Style Analysis”), patented hedge fund analysis software, combined with the Portfolio Manager’s qualitative knowledge of the hedge fund investor community to develop investment strategies.

Fund Documents

Financial Professional Documents

Portfolio Manager Commentaries

May 2013 Portfolio Manager's Commentary
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April 2013 Portfolio Manager's Commentary
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Net Sector Allocation

QEH in the News

The following reprints should not be construed as an offer to sell or a solicitation of an offer to buy shares of any other funds. They are provided for informational purposes for AdvisorShares only.

12/28/2012 -

AdvisorShares Press Release, AdvisorShares Announces December 2012 Distributions

11/01/2012 - Devasbi, Kris. "Hedge fund replication strategies come of age." http://www.hedgefundsreview.com/hedge-funds-review/feature/2219059/hedge-fund-replication-strategies-come-of-age

10/16/2012 - Kass, Doug. "Doug Kass: Invest Like a Hedge Fund With This ETF." http://www.thestreet.com/story/11738558/1/kass-katch-qeh.html?cm_ven=GOOGLEN

10/09/2012 - Dutram, Eric. "Track Market Gurus With These 3 ETFs (GURU, QEH, ALFA)." http://www.zacks.com/stock/news/84395/track-market-gurus-with-these-etfs

08/10/2012 - Johnston, Michael. "AdvisorShares Launches Long/Short Hedge Fund ETF (QEH)." http://etfdb.com/2012/advisorshares-launches-longshort-hedge-fund-etf-qeh/

Performance -Quarter-End

QEH Performance History (%) as of 03/31/2013

	NAV	Market Price Return	HFRI Equity Hedge (Total) Index
1 Month	1.18	0.95	1.45
3 Month	3.67	4.30	5.29
YTD	3.67	4.30	5.29
Since Inception (08/07/2012)	6.94	6.97	-

Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. Returns less than one year are not annualized.

The HFRI Equity Hedge (Total) Index is a fund-weighted index of select hedge funds focusing on Equity Hedge strategies. Equity Hedge investing consists of a core holding of long equities hedged at all times with short sales of stocks and/or stock index options. One cannot invest directly in an index.

Performance -Month-End

QEH Performance History (%) as of 04/30/2013

	NAV	Market Price Return	HFRI Equity Hedge (Total) Index
1 Month	0.79	0.38	0.53
3 Month	1.75	1.33	2.16
YTD	4.49	4.69	5.56
Since Inception (08/07/2012)	7.79	7.37	-

Fund Distributions

Ex-Date	Record Date	Pay Date	Cash Div	ST Cap Gain	LT Cap Gain	Return of Capital	Total Distribution
12-27-13	12-31-13	01-03-14	-	-	-	-	-
12-27-12	12-31-12	01-03-13	$0.075	$0.102	$0.00	$0.00	$0.178/per share

Why Invest in QEH?

Risk-Adjusted Returns - Investing in QEH attempts to provide an investor with better risk adjusted returns versus the S&P 500 Index over time while reducing the time required and expertise needed to select individual hedge funds.
Access to Liquid Alternatives - To gain access to an alternative investment strategy that is fully transparent and has intraday liquidity.
Turnkey Solution to Allocating to Long/Short Equity - Reduce the time spent, cost of researching, and risk of selecting individual hedge fund managers. QEH provides a solution for adding this to a diversified investment portfolio.
Precision is Key - QEH seeks high correlation to the benchmark index in order to provide investors an investable solution to an otherwise non-investable index. QEH’s actively managed approach seeks to perform better than 50% of the long short equity hedge fund manager universe as tracked by HFRI.

5 Key Attributes

Diversified Exposure - QEH invests in a diversified portfolio of securities such as ETFs, ETNs and currencies that offer investors diversified exposure to global regions, countries, investment styles (i.e., value, growth), sectors and industries.
Net Market Exposure - QEH’s net market exposure typically ranges from 40% to 60% (although exposures may be more or less).
Diversified Hedge Fund Strategy - QEH attempts to closely track the risk/return profile of the non-investible HFRI Equity Hedge Total Index on a monthly basis, while seeking to out perform that index benchmark over time.
Potentially Lower Volatility - QEH’s moderate net market exposure of between 40% and 60% may result in volatility that is lower than that of a fully allocated global equity fund.
Extensive Hedge Fund Investor Knowledge - The Portfolio Managers have almost 30 years of combined experience in researching hedge funds, along with investing in hedge funds and managing hedge fund of fund portfolios.

About the Portfolio Managers

Kurt Voldeng, CAIA – Chief Operating Officer & Portfolio Manager
Mr. Voldeng’s responsibilities include portfolio management for QEH. In addition, Mr. Voldeng evaluates, structures, and monitors non-traditional investment assets for both institutional and individual clients. Prior to joining the Sub-Advisor in 2011, Mr. Voldeng began his career with Consulting Services Group, LLC as an analyst in 1990. From 1999 to 2011, he served as an executive vice president and senior consultant focusing on alternative investments. During Mr. Voldeng’s tenure, he managed over $1 billion in discretionary customized hedge fund portfolio assets and consulted on over $6 billion in hedge fund assets.

Mr. Voldeng earned both a B.S. in Finance and M.B.A. from the University of Memphis and is a Chartered Alternative Investment Analyst (CAIA).

Akos Beleznay – Chief Investment Officer & Portfolio Manager
Mr. Beleznay’s responsibilities include statistical analysis and portfolio management of QEH. Prior to joining the Sub-Advisor, Mr. Beleznay was the Director of Consulting Research for Equitas Capital Advisors, LLC from 2002 to 2010 and Chief Investment Officer of Equitas Evergreen Fund LP, a fund of hedge funds with peak assets of $300 million, from 2003 to 2010.

Mr. Beleznay earned an MBA from the Freeman School of Business at Tulane University, New Orleans and a PhD degree in Physics from Eotvos Lorand University, Hungary.

There is no guarantee that the Fund will achieve its investment objective. An investment in the Fund is subject to risk, including the possible loss of principal amount invested. The Fund may invest in derivatives to gain market exposure, enhance returns or hedge against market declines. Derivatives may be riskier than other types of investments because they may be more sensitive to changes in economic or market conditions than other types of investments and could result in losses that significantly exceed the Fund's original investment. The Fund may participate in leveraged transactions to include selling securities short which create the risk of magnified capital losses. Under certain market conditions, short sales can increase the volatility and decrease the liquidity of certain securities or positions and may lower the Fund’s return or result in a loss. The Fund is subject to the underlying ETFs and ETNs risks that comprise this “fund of funds." ETNs are senior, unsecured unsubordinated debt securities issued by an underwriting bank that are designed to provide returns that are linked to a particular benchmark less investor fees. ETNs have a maturity date and generally are backed only by the creditworthiness of the issuer. As a result, the value of an ETN may be influenced by time of maturity, level of supply and demand for the ETN, volatility and lack of liquidity in the underlying market (e.g., the commodities market), changes in the applicable interest rates, and changes in the issuer's credit rating and economic, legal, political or geographic events that affect the referenced market. This Fund may not be suitable for all investors.
A long position is the purchase of an investment with the expectation that it will rise in value. A short position is sale of a borrowed investment with the expectation that it will decline in value. ETNs are senior, unsecured unsubordinated debt securities issued by an underwriting bank that are designed to provide returns that are linked to a particular benchmark less investors fees.

The HFRI Equity Hedge (Total) Index is a fund-weighted index of select hedge funds focusing on Equity Hedge strategies. Equity Hedge investing consists of a core holding of long equities hedged at all times with short sales of stocks and/or stock index options.

The HFRI Equity Hedge Index and HFR are the trademarks and service marks of Hedge Fund Research, Inc. (“HFR”) and are used under license from HFR. HFR is in no way related or connected to or affiliated with Commerce Asset Management, LLC or the Licensee Fund. HFR has not participated in the formation of the Licensee Fund, and HFR does not endorse, approve or recommend investing in the Licensee Fund.

Fund Basics

Symbol

QEH
Exchange

NYSE Arca
Inception Date

08/07/2012
CUSIP

00768Y750
Indicative Value

QEH.IV
Options

No

Manager Minutes, May 2013

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Price History

As of: 05/23/2013

NAV	$27.08	Closing Price	$27.12
Change	$-0.12	Change	$-0.38
Shares Outstanding	150,000	Volume
4PM Bid/Offer Midpoint	$27.09	Premium/Discount	$0.01
Assets Under Management	$4,061,657.91
Premium/Discount Historical Data

Top Long Holdings (Log in above to view all holdings)

As of: 05/23/2013

Ticker	Name	Weight
SHV	ISHARES BARCLAYS SHORT TR	9.24%
BIL	SPDR BARCLAYS 1-3 MONTH T-BILL ETF	9.23%
RSP	GUGGENHEIM S&P 500 EQUAL WEI	8.98%

Top Short Holdings (Log in above to view all holdings)

As of: 05/23/2013

Ticker	Name	Weight
FXB	CURRENCYSHARES BRITISH POUND STERLING TRUST	-3.43%
FXY	CURRENCYSHARES JAPANESE YEN	-1.47%
LCXU	EURO STOXX LARGE NET RETURN SWAP	-0.74%
FEZ	SPDR EURO STOXX 50 ETF	-0.55%

Shares are bought and sold at market price (closing price) not NAV and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined), and do not represent the return you would receive if you traded at other times. Holdings and allocations are subject to risks and to change. A holding identified with an "MM" at the end of its name indicates it is a Money Market fund.

Fees & Expenses

Management Fee

1.00%
Other Expenses

0.39%
Acquired Fund Fees

0.25%
Gross Expense Ratio

1.64%
Net Expense Ratio

1.64%