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(VEGA) STAR Global Buy-Write ETF

Overview

How VEGA Works

The AdvisorShares STAR Global Buy-Write ETF (NYSE Arca: VEGA) seeks consistent repeatable returns across all market cycles. VEGA is sub-advised by Partnervest Advisory Services, LLC (“Portfolio Manager”). The Portfolio Manager seeks to achieve the investment objective by using a proprietary strategy known as Volatility Enhanced Global Appreciation (“VEGA”). VEGA is primarily a “fund of funds” and employs a “Buy-Write” or “Covered Call” overlay for its global allocation strategy using Exchange Traded Products (ETPs).

According to the internal benchmark policy, the Portfolio Manager will use both ETFs and individual equities to implement its tactical allocation strategy in which the volatility of each of the underlying positions determines the amount of option hedging. During periods of high volatility, the Portfolio Manager will write (or sell) a call option against some of its positions in order to hedge downside risk, while generating an income stream from the sale of options. At any given time, approximately 60% to 85% of VEGA’s positions will have covered options. Additionally when volatility is low, the portfolio manager buys protective put options to manage downside risk.

Fund Documents

Portfolio Manager Commentaries

VEGA in the News

12/31/2013 -

AdvisorShares Press Release, AdvisorShares Announces December 2013 Distributions

10/30/2013 - Coleman, Murray. "Income-Hungry Investors Turn to Stock Options." http://online.wsj.com/news/articles/SB10001424052702304073204579167440703637858
05/02/2013 - "Tomorrow in :30: All Eyes on Employment & The Market." http://video.cnbc.com/gallery/?video=3000164637&play=1
02/26/2013 - Witkowski, Wallace. "VIX retreats sharply after spike; its ETFs fare better." http://blogs.marketwatch.com/thetell/2013/02/26/vix-retreats-sharply-after-spike-its-etfs-fare-better/
12/28/2012 -

AdvisorShares Press Release, AdvisorShares Announces December 2012 Distributions

Performance -Month-End

VEGA Performance History (%) as of 07/31/2014
 NAVMarket Price ReturnMSCI World Index
1 Month -1.18-1.37-1.60
3 Months 1.331.332.13
YTD3.563.324.48
1 Year 7.937.7915.96
Since Inception
(09/17/2012)
2.292.2616.36

Performance -Quarter-End

VEGA Performance History (%) as of 06/30/2014
 NAVMarket Price ReturnMSCI World Index
1 Month 1.001.201.79
3 Months 3.073.274.86
YTD 4.804.756.18
1 Year 10.8911.0124.05
Since Inception
(09/17/2012)
3.083.1718.26

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 MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. One cannot invest directly in an index.

Fund Distributions

Ex-DateRecord DatePay DateCash DivST Cap GainLT Cap GainReturn of CapitalTotal Distribution
12-29-14
12-31-14
01-05-15
-----
12-27-13
12-31-13
01-03-14
$0.00$0.00$0.00$0.00$0.00/per share
12-27-12
12-31-12
01-03-13
$0.167$0.031$0.00$0.00$0.198/per share
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Why Invest in VEGA?

  • Low Volatility Risk Managed Solution - The asset allocation, option writing decisions, and overall portfolio put protection is heavily driven by volatility. When added to a traditional investment portfolio, VEGA will attempt to manage downside risk while seeking to gain as much of the upside growth as possible.
  • For a Total Return Solution - The performance for VEGA will be driven by both equity growth and income; additionally, option income may provide additional return diversification to the overall total return of the portfolio.

5 Key Attributes

  1. Tactical - The asset allocation of the portfolio is tactically managed based on the volatility of the underlying asset classes. This tactical allocation provides a secondary form of managing risk in the portfolio.
  2. Options Hedging - As markets drop, the levels of implied volatility increase. Higher implied volatility results in higher than average option premiums that can offset downside moves, and VEGA will employ a higher percentage of hedging. When volatility is low, long term protective puts can be employed to protect in severe downward spikes. Volatility-based reinvesting insures a buy low, sell high discipline using a portion of the earned option income.
  3. Harnessing Volatility - Option premiums are used to seek to enhance the VEGA portfolio by writing call options on the ETF positions, in an effort to create less dependence on markets for returns during market downturns. Volatility may allow investors to add to their return when options are not exercised.
  4. Total Return Solution - The Portfolio Manager believes that VEGA can structure a target outcome, through an option overlay strategy on a global allocation strategy to generate returns.
  5. Income - The overwrite options strategy seeks to generate a return stream in the form of option premiums that accrue independently of the underlying investments and are not subject to equity risk.

About the Portfolio Managers

James G. Herrell, CFA, Director of Investments
Mr. Herrell has spent 21 years in the asset management industry. He specializes in alternative assets, particularly hedged and absolute return strategies. In 1991, he became a partner and head trader at Strome & Co. in Santa Monica. In addition, he helped manage $25 million for George Soros’ Quasar Fund. Management expertise coupled with opportunistic investing across a broad spectrum of global markets enabled the fund to grow its assets from $50 million to more than $1.1 billion by the end of 1994. Relocating to Santa Barbara, Mr. Herrell managed $250 million for the Trust & Investment division at Pacific Capital Bancorp, covering high net worth and institutional clients. He joined Partnervest in July 2008, and developed and manages the Structured Target Return Program.

Kenneth R. Hyman, President and Chief Executive Officer
Kenneth R. Hyman founded Partnervest in 2001 and is responsible for the direction and oversight of Partnervest’s business, financial, and operational affairs. He also serves as Co-Portfolio Manager and member of the Investment Management Committee overseeing the STAR Asset Management program. Established in 2001, the Sub-Advisor provides investment management solutions to investors and the advisors that serve them. Prior to establishing Partnervest, Mr. Hyman was the Senior Executive and Financial Officer for Integral Securities, Inc. and Integral Securities Europe Ltd. Prior to Partnervest and Integral, Mr. Hyman was the Managing Principal and Chief Operating Officer of Mercer Global Securities and the Director of Operations for Mercer Global Advisors, one of the nation’s largest fee-only financial planning and investment management firms. He was also the Vice-President of Trading for Associated Financial Group, a financial services company providing support to more than 328 representatives in over 179 branch and satellite offices.

Scott Dooley, CFA
Mr. Dooley joined Partnervest in 2013 and serves as a portfolio manager, as well as an ad hoc member of its Investment Management Committee. He is also the co-founder and Managing Director of Fusion Investment Group, LLC, an SEC registered investment advisory firm that specializes in global asset management solutions. Mr. Dooley oversees all portfolio management activities and investment research at Fusion Investment Group, LLC. Prior to co-founding Fusion in 2006, he served as Managing Partner and Chief Investment Officer for Blue Vase Capital Management. Recognized by Institutional Investor News as one of the '20 Rising Stars of Hedge Funds', Mr. Dooley has a BS degree with Honors in Finance from Grove City College and an MBA from the University of Chicago Booth School of Business. Mr. Dooley has earned the Chartered Financial Analyst (CFA) designation and is a member of the CFA Institute and CFA Society of Pittsburgh.

Chris Romano, CFA
Mr. Romano joined Partnervest in 2013 and serves as a portfolio manager, as well as an ad hoc member of its Investment Management Committee. He is also Director of Research at Fusion Investment Group, LLC, an SEC registered investment advisory firm that specializes in global asset management solutions. Mr. Romano is responsible for the research and design of quantitative models, along with the development and implementation of trading processes and systems for the firm's products. He obtained his Bachelor of Science degree in Information Science with a minor in Business from the University of Pittsburgh, where he graduated Magna Cum Laude. He joined Blue Vase Securities, LLC in 2002 as System Administrator and brokerage support. He was an integral part of every department within the firm -- working with the trading desk, constructing a new commission system for the RIA Division, and overseeing the functionality of the computer systems. Mr. Romano joined ITS Asset Management's IT Department in 2004 and was responsible for overseeing that department even while his primary function at the firm was his position as a Member of ITS's Investment Advisory Committee providing insight and analytical information to be used for upcoming asset allocations. Mr. Romano has earned the Chartered Financial Analyst (CFA) designation and is a member of the CFA Institute and CFA Society of Pittsburgh.

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Fund Basics

  • Symbol

    VEGA

  • Exchange

    NYSE Arca

  • Inception Date

    09/17/2012

  • CUSIP

    00768Y768

  • Indicative Value

    VEGA.IV

  • Options

    No

Manager Minutes, August 2014

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Price History

As of: 08/21/2014
NAV$26.42Closing Price$26.38
Change$0.04Change$0.07
Shares Outstanding1,000,000Volume596
4PM Bid/Offer Midpoint$26.40Premium/Discount$-0.02
Assets Under Management$26,421,626.08
Premium/Discount Historical Data

 

Top Holdings

As of: 08/21/2014
Ticker Name Weight
SPY SPDR S&P 500 ETF TRUST 23.86%
--- CASH 14.95%

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

    1.35%

  • Other Expenses

    1.00%

  • Acquired Fund Fees

    0.25%

  • Gross Expense Ratio

    2.60%

  • Fee Waiver and/or Expense Reimbursement

    0.50

  • Net Expense Ratio

    2.10%*

  • *The Advisor has contractually agreed to keep net expenses from exceeding 1.85% for at least a year from the date of the Prospectus and for an indefinite period thereafter subject to annual reapproval of the agreement by the Board of Trustees.