(FLRT) PACIFIC ASSET ENHANCED FLOATING RATE ETF

FLRT

Overview

The AdvisorShares Pacific Asset Enhanced Floating Rate ETF (NYSE Arca: FLRT) seeks to provide a high level of current income. FLRT is managed by Pacific Asset Management (“Portfolio Manager”). The Portfolio Manager seeks to achieve FLRT’s investment objective by selecting a focused portfolio comprised primarily of income producing floating rate loans and floating rate debt securities (commonly referred to as bank loans, leveraged loans or floating rate loans), which consist of senior secured and unsecured floating rate loans, secured second lien floating rate loans, and other floating rate debt securities of domestic and foreign issuers.

Symbol Exchange Inception Date CUSIP Indicative Value
FLRT NYSE Arca 2/18/2016 00768Y594 FLRT.IV
<strong>Why Invest in FLRT?</strong>
  • For a Dedicated Yield Focus – Unlike its peers, FLRT offers a dedicated floating rate portfolio focused on yield, approached with a focus on the larger, rated issuers within the loan universe. The Portfolio Manager believes that this process provides a margin of safety and downside risk protection relative to the smaller, non-rated companies.
  • For Opportunistic Leverage –In a bid to enhance potential yield and total return, FLRT has the flexibility to invest 80 -130% of its assets based on the Portfolio Manager’s analysis of market conditions.
  • For a Disciplined Investment Process – The Portfolio Manager believes that a disciplined portfolio decision-making process that focuses on credit fundamentals for individual security selection will lead to outstanding long-term performance versus FLRT’s peers and its benchmark. They further believe that the focus should be on the fundamentals of the businesses in which FLRT invests.
<strong>Where Can FLRT Fit in a Traditional Portfolio?</strong>

FLRT may serve as a yield enhancing, complement to core fixed income positions. Floating rate funds often offer yields that are competitive with the high yield segment but with the added opportunity of potential protection against rising rates.

This is possible due to the nature of the floating rate market which is that the interest rate is adjusted on a regular schedule to attract investor demand. If interest rates in the broad market head higher then the interest rates charged to the borrower will be adjusted higher as well with a modest time lag.

<strong>Key Attributes</strong>
  1. Floating Rate Strategy – FLRT offers investors a focused portfolio comprised of income producing floating rate loans and floating rate debt securities which aims to provide a high level of current income.
  2. Liquid – The Portfolio Manager’s active management approach favors names that make up the most liquid segment of the bank loan marketplace. This allows for more fluid entry and exit of positions as needed.
  3. Focus on Corporate Credit – The Portfolio Manager covers the entire credit spectrum ‘AAA’ to ‘C’, which gives them a unique perspective on relative value and may offer investors favorable risk/reward opportunities.
  4. Limited Asset Class Correlation – With unique structural characteristics, bank loans have limited correlations to most major asset classes, providing portfolio diversification across various fixed income and equity asset classes.
  5. Experienced Bank Loan Investment Team – The Portfolio Manager has focused on bank loans since the firm’s founding. FLRT’s investment professionals possess an average of 14 years of investment experience.
<strong>About the Portfolio Managers</strong>

Bob Boyd, Managing Director Pacific Asset Management
Bob serves as a Portfolio Manager and Credit Analyst for the firm. He joined Pacific Asset Management in 2012. Previously, Bob was with Pacific Investment Management (PIMCO) for 14 years, where he was a Vice President, Bank Loan Portfolio Manager, and Credit Analyst. Bob has over 17 years of investment experience focused on leveraged finance, credit analysis, and structured products. He holds a bachelor’s degree from California State University, Long Beach and an MBA from the University of Southern California.

Michael Marzouk, CFA, Portfolio Manager and ETF Investment Committee Member
Mr. Marzouk is a Managing Director for the Sub-Advisor and a member of the Sub-Advisor’s ETF Investment Committee. Mr. Marzouk serves as a Portfolio Manager and Credit Analyst for the firm. He joined the Sub-Advisor in 2007. Mr. Marzouk has over 17 years of investment experience focused on leveraged finance and credit research. Mr. Marzouk has a bachelor’s degree from the University of California, Los Angeles and an MBA from the Anderson School of Management.

Fund

Price History

As of 9/17/2019

NAV $49.04 Closing Price $48.96
Change $0.02 Close Change $-0.06
Shares Outstanding 600,000.00 Volume 100
4PM Bid/Offer Midpoint $48.96 Premium Discount $-0.08
Assets Under Management $29,422,706.22

Premium/Discount Historical Data | NAV Historical Data

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.

FUND

Performance

As of 8/31/2019

  NAV Market Price Return S&P/LSTA U.S. Leveraged Loan 100 Index
1 Month 0.11 0.11 -0.43
3 Months 1.39 1.40 0.89
YTD 7.10 6.93 7.52
1 Year 3.64 3.62 3.54
3 Years 3.40 3.53 4.30
Since Inception (2/18/2015, Annualized) 3.15 3.13 3.61

As of 6/30/2019

  NAV Market Price Return S&P/LSTA U.S. Leveraged Loan 100 Index
1 Month 0.47 0.55 0.23
3 Months 1.62 1.63 1.55
YTD 6.13 6.04 6.81
1 Year 4.09 3.82 4.18
3 Years 3.74 4.07 4.88
Since Inception (2/18/2015, Annualized) 3.06 3.06 3.60

Performance data quoted represents past performance and is no guarantee of future results. All Fund data and performance data quoted is believed to be accurate, and unless otherwise stated, is sourced from the Fund administrator, the Advisor’s or Sub-Advisor’s proprietary data, and Morningstar. 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.

Top Ten

Holdings

As of 9/17/2019

FUND

Characteristics

As of 07/31/2019

FLRT Sector Allocation

Pacific Asset Management (PAM) provides credit-quality ratings, which are received on underlying securities of the Fund from major rating agencies. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). When the rating agencies rate a security differently, PAM uses the higher rating. Below investment grade is represented by a rating of BB and below. Ratings and portfolio credit quality may change over time.

FUND

Fixed Income Attributes

As of 07/31/2019

Description Percentage
30-Day SEC Subsidized Yield 4.33%
30-Day SEC Unsubsidized Yield 3.92%

Past Performance is not indicative of future results. 30–Day SEC Yield (Standardized Yield) is an annualized yield that is calculated by dividing the investment income earned by the Fund less expenses over the most recent 30-day period by the current maximum offering price. The Subsidized Yield reflects fee waivers and/or expense reimbursements recorded by the Fund during the period. Without waivers and/or reimbursements, yields would be reduced. The Unsubsidized Yield does not adjust for any fee waivers and/ or expense reimbursements in effect. If the Fund does not incur any fee waivers and/or expense reimbursements during the period, the 30-Day Subsidized Yield and 30-Day Unsubsidized Yield will be identical.

Pacific Asset Management (PAM) provides credit-quality ratings, which are received on underlying securities of the Fund from major rating agencies. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). When the rating agencies rate a security differently, PAM uses the higher rating. Below investment grade is represented by a rating of BB and below. Ratings and portfolio credit quality may change over time.

Average Weighted Coupon is generated by weighting the coupon of each bond by its relative size in the portfolio. Coupons are fixed percentages paid out on a fixed-income security on an annual basis.
Yield to Maturity describes the rate of return an investor will receive if a long-term, interest-bearing security, such as a bond, is held to its maturity date. Average Yield to Maturity represents the average YTM of the funds portfolio of bonds.

FUND

Fees & Expenses

Management Fee 0.95%
Other Expenses 0.67%
Gross Expenses Ratio 1.66%
Fee Waiver and/or Expense Reimbursement -0.52%
Net Expense Ratio 1.14%

*The Advisor has contractually agreed to reduce its fees and/or reimburse expenses to keep net expenses from exceeding 0.99% of the Fund’s average daily net assets for at least one year from the date of the Prospectus.

Last Ten

Fund Distributions

Ex-Date Record Date Pay Date Cash Div ST Cap Gain LT Cap Gain Return of Capital Total Distribution (per share) FLRT
12/27/2019 12/30/2019 - - - - -
11/26/2019 11/27/2019 - - - - -
10/28/2019 10/29/2019 - - - - -
09/25/2019 09/26/2019 - - - - -
08/27/2019 08/28/2019 08/30/2019 $0.15978 $0.00 $0.00 $0.00 $0.18593
07/26/2019 07/29/2019 07/31/2019 $0.19290 $0.00 $0.00 $0.00 $0.19290
06/25/2019 06/26/2019 06/28/2019 $0.15978 $0.00 $0.00 $0.00 $0.15978
05/28/2019 05/29/2019 05/31/2019 $0.21393 $0.00 $0.00 $0.00 $0.21393
04/25/2019 04/26/2019 04/30/2019 $0.16548 $0.00 $0.00 $0.00 $0.16548
02/26/2019 02/27/2019 02/28/2019 $0.17989 $0.00 $0.00 $0.00 $0.17989
01/28/2019 01/29/2019 01/31/2019 $0.18261 $0.00 $0.00 $0.00 $0.18261
12/27/2018 12/28/2018 12/31/2018 $0.16718 $0.00 $0.00 $0.00 $0.16718
11/27/2018 11/28/2018 11/30/2018 $0.17046 $0.00 $0.00 $0.00 $0.17046
10/26/2018 10/29/2018 10/31/2018 $0.19255 $0.00 $0.00 $0.00 $0.19255
09/26/2018 09/27/2018 09/28/2018 $0.15863 $0.00 $0.00 $0.00 $0.15863
08/27/2018 08/28/2018 08/31/2018 $0.17165 $0.00 $0.00 $0.00 $0.17165
07/26/2018 07/27/2018 07/31/2018 $0.16042 $0.00 $0.00 $0.00 $0.16042
06/25/2018 06/26/2018 06/29/2018 $0.12630 $0.00 $0.00 $0.00 $0.12630
05/25/2018 05/29/2018 05/31/2018 $0.15685 $0.00 $0.00 $0.00 $0.15685
04/25/2018 04/26/2018 04/30/2018 $0.16188 $0.00 $0.00 $0.00 $0.16188
03/26/2018 03/27/2018 03/29/2018 $0.11165 $0.00 $0.00 $0.00 $0.11165
02/26/2018 02/27/2018 02/28/2018 $0.14616 $0.00 $0.00 $0.00 $0.14616
01/26/2018 01/29/2018 01/31/2018 $0.13258 $0.00 $0.00 $0.00 $0.13258
12/27/2017 12/28/2017 12/29/2017 $0.14166 $0.00 $0.00 $0.00 $0.14166
11/28/2017 11/29/2017 11/30/2017 $0.13872 $0.00 $0.00 $0.00 $0.13872
10/27/2017 10/30/2017 10/31/2017 $0.12954 $0.00 $0.00 $0.00 $0.12954
09/26/2017 09/27/2017 09/29/2017 $0.11144 $0.00 $0.00 $0.00 $0.11144
08/25/2017 08/29/2017 08/31/2017 $0.13305 $0.00 $0.00 $0.00 $0.13305
07/26/2017 07/28/2017 07/31/2017 $0.14237 $0.00 $0.00 $0.00 $0.14237
06/23/2017 06/28/2017 06/30/2017 $0.10675 $0.00 $0.00 $0.00 $0.10675
05/23/2017 05/26/2017 05/31/2017 $0.13903 $0.00 $0.00 $0.00 $0.13903
04/21/2017 04/26/2017 04/28/2017 $0.14105 $0.00 $0.00 $0.00 $0.14105
03/24/2017 03/28/2017 03/31/2017 $0.13792 $0.00 $0.00 $0.00 $0.13792
02/23/2017 02/27/2017 02/28/2017 $0.15173 $0.00 $0.00 $0.00 $0.15173
01/25/2017 01/27/2017 01/31/2017 $0.10340 $0.00 $0.00 $0.00 $0.10340
12/23/2016 12/28/2016 12/30/2016 $0.18560 $0.00 $0.00 $0.00 $0.18560
11/23/2016 11/28/2016 11/30/2016 $0.14010 $0.00 $0.00 $0.00 $0.14010
10/25/2016 10/27/2016 10/31/2016 $0.15550 $0.00 $0.00 $0.00 $0.15550
09/26/2016 09/28/2016 09/30/2016 $0.13740 $0.00 $0.00 $0.00 $0.13740
08/25/2016 08/29/2016 08/31/2016 $0.14130 $0.00 $0.00 $0.00 $0.14130
07/25/2016 07/27/2016 07/29/2016 $0.14960 $0.00 $0.00 $0.00 $0.14960
06/24/2016 06/28/2016 06/30/2016 $0.14640 $0.00 $0.00 $0.00 $0.14640
05/24/2016 05/26/2016 05/31/2016 $0.13600 $0.00 $0.00 $0.00 $0.13600
04/25/2016 04/27/2016 04/29/2016 $0.13350 $0.00 $0.00 $0.00 $0.13350
03/24/2016 03/29/2016 03/31/2016 $0.13110 $0.00 $0.00 $0.00 $0.13110
02/23/2016 02/25/2016 02/29/2016 $0.13190 $0.00 $0.00 $0.00 $0.13190
01/25/2016 01/27/2016 01/29/2016 $0.10420 $0.00 $0.00 $0.00 $0.10420
12/24/2015 12/29/2015 12/31/2015 $0.18670 $0.00 $0.00 $0.00 $0.18670
11/23/2015 11/25/2015 11/30/2015 $0.13430 $0.00 $0.00 $0.00 $0.13430
10/26/2015 10/28/2015 10/30/2015 $0.15650 $0.00 $0.00 $0.00 $0.15650
09/24/2015 09/28/2015 09/30/2015 $0.16230 $0.00 $0.00 $0.00 $0.16230
08/25/2015 08/27/2015 08/31/2015 $0.15420 $0.00 $0.00 $0.00 $0.15420
07/24/2015 07/28/2015 07/30/2015 $0.14690 $0.00 $0.00 $0.00 $0.14690
06/24/2015 06/26/2015 06/30/2015 $0.19990 $0.00 $0.00 $0.00 $0.19990
05/22/2015 05/27/2015 05/29/2015 $0.17200 $0.00 $0.00 $0.00 $0.17200
04/24/2015 04/28/2015 04/30/2015 $0.14640 $0.00 $0.00 $0.00 $0.14640
03/25/2015 03/27/2015 03/31/2015 $0.05740 $0.00 $0.00 $0.00 $0.05740
  • Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting the Fund’s 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. An investment in the Fund is subject to risk, including the possible loss of principal amount invested. Investing in derivatives may be riskier than other types of investments because they are more sensitive to change in economic or marketing conditions that could result in losses that significantly exceed the Fund’s original investment. The Fund primarily invests in floating rate loans and floating rate debt securities. The market for floating rate loans may be subject to irregular trading activity, wide bid/ask spreads, and extended trade settlement periods. The floating rate feature of loans means that floating rate loans will not generally experience capital appreciation in a declining interest rate environment. Declines in interest rates may also increase prepayments of debt obligations and require the Fund to invest assets at lower yields. Other Fund risks include market risk, leverage risk, foreign investment risk, liquidity risk, income and interest rate risk, liquidity risk, management risk, high yield securities risk, loan participation risk, prepayment risk, and trading risk. Please see the prospectus for details regarding risk.