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(HYLD) Peritus High Yield ETF

Overview

How HYLD Works

The investment objective of the AdvisorShares Peritus High Yield ETF (NYSE Arca: HYLD) is to generate a high current income with a secondary goal of capital appreciation. HYLD is sub-advised by Peritus I Asset Management, LLC. Peritus seeks to achieve the Fund’s objective by selecting a focused portfolio largely of high yield corporate debt securities that, via their coupons, generate a high, tangible income stream. Peritus takes a value-based, active credit approach to the markets, primarily focusing on the secondary market where Peritus believes there is less competition and more opportunities for capital gains. Peritus de-emphasizes relative value in favor of long-term, absolute returns.

Fund Documents

Portfolio Manager Commentaries

Fund Statistics & Industry Breakdown

as of 11/30/2017
  HYLD Bloomberg Barclays US Corporate High Yield Bond Index
Coupon 8.10% 6.41%
Yield to Maturity 8.56% 6.14%
Duration 2.89 years 3.90 years
     
Number of Holdings 87
12-Month Yield 7.06%
Current Yield 8.13%
30-Day SEC Unsubsidized Yield 7.30%
30-Day SEC Subsidized Yield 7.30%

Past Performance is not indicative of future results. HYLD statistics and industry breakdowns are for the actual HYLD security holdings as of the listed date, excluding cash, and the coupon, maturity in years, modified duration, yield to maturity, and ratings breakdown additionally exclude non-fixed income holdings, such as equities. For the purposes of the duration calculation, equity holdings have been excluded and loans assigned a duration of 0.25. Yield to Maturity is the yield if the security is held until the maturity date. Duration is the change of a fixed income security that will result from a 1% change in interest rate. HYLD uses a modified duration calculation and the Barclays High Yield Index a Macaulay duration calculation, both based on the yield to worst date. Current Yield is the bond’s annual coupon income divided by the bond’s current price. 12-Month Yield is the sum of the fund’s dividend payments over the last twelve months divided by the fund NAV as of the listed date, expressed as a percentage. 30–Day SEC Yield (Standardized Yield) is an annualized yield furnished by the Fund's custodian 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.

HYLD Breakdown

HYLD Credit Ratings

as of 11/30/2017
Bond Rating (Category Average, ex-cash)Holdings
BBB-0.00%
BB+0.00%
BB1.47%
BB-10.81%
B+7.12%
B25.45%
B-27.68%
CCC+16.09%
CCC6.26%
CCC-2.14%
CC0.00%
C0.00%
D*1.27%
Not Rated1.70%

The Moody’s and S&P bond ratings have been calculated for each ratings category, and then the average of the two rating agencies’ percentage for each listed category has been calculated and presented herein. For the purposes of this presentation, Moody’s ratings have been mapped to the S&P equivalent. In cases were only one agency rates a security that rating will be used throughout and Provisional and Expected ratings have been used when provided. The ratings have been provided for the debt holdings, excluding cash and any equity holdings. A Standard & Poor's issue credit rating is a forward-looking opinion about the creditworthiness of an obligor with respect to a specific financial obligation. Moody’s ratings are forward-looking opinions of the relative credit risks of financial obligations issued by the issuing entity.

The credit ratings are published rankings based on detailed financial analyses by a credit bureau specifically as it relates the bond issue's ability to meet debt obligations. The highest rating is AAA, and the lowest is D. Securities with credit ratings of BBB and above are considered investment grade.

HYLD 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.
04/25/2017 -

AdvisorShares Press Release, AdvisorShares Announces April 2017 Distributions

03/31/2017 -

AdvisorShares Press Release, AdvisorShares Announces March 2017 Distributions

02/28/2017 -

AdvisorShares Press Release,AdvisorShares Announces February 2017 Distributions

01/31/2017 -

AdvisorShares Press Release,AdvisorShares Announces January 2017 Distributions

12/29/2016 -

AdvisorShares Press Release, AdvisorShares Announces December 2016 Distributions

Performance -Month-End

HYLD Performance History (%) as of 11/30/2017
 NAVMarket Price ReturnBloomberg Barclays US Corporate High Yield Bond Index
1 Month0.580.60-0.26
3 Months2.692.951.07
YTD8.048.457.18
1 Year11.0011.899.16
3 Years0.390.805.73
5 Years1.871.676.04
Since Inception
(11/30/2010, Annualized)
3.633.477.27

Performance -Quarter-End

HYLD Performance History (%) as of 9/30/2017
 NAVMarket Price ReturnBloomberg Barclays US Corporate High Yield Bond Index
1 Month1.161.040.90
3 Months1.971.761.98
YTD6.426.447.00
1 Year11.3010.458.88
3 Years-2.50-2.885.83
5 Years1.741.456.36
Since Inception
(11/30/2010, Annualized)
3.503.287.43

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 Bloomberg Barclays US Corporate High Yield Bond Index is an unmanaged index considered representative of the universe of U.S. fixed rate, non investment grade debt. One cannot invest directly in an index.

Fund Distributions

Ex-DateRecord DatePay DateCash DivST Cap GainLT Cap GainReturn of CapitalTotal Distribution
12-27-17
12-28-17
12-29-17
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11-28-17
11-29-17
11-30-17
$0.22858$0.00$0.00$0.00$0.22858/per share
10-27-17
10-30-17
10-31-17
$0.21878$0.00$0.00$0.00$0.21878/per share
09-26-17
09-27-17
09-29-17
$0.23287$0.00$0.00$0.00$0.23287/per share
08-25-17
08-29-17
08-31-17
$0.20971$0.00$0.00$0.00$0.20971/per share
07-26-17
07-28-17
07-31-17
$0.21390$0.00$0.00$0.00$0.21390/per share
06-23-17
06-28-17
06-30-17
$0.20507$0.00$0.00$0.00$0.20507/per share
05-23-17
05-26-17
05-31-17
$0.20729$0.00$0.00$0.00$0.20729/per share
04-21-17
04-26-17
04-28-17
$0.21356$0.00$0.00$0.00$0.21356/per share
03-24-17
03-28-17
03-31-17
$0.21678$0.00$0.00$0.00$0.21678/per share
02-23-17
02-27-17
02-28-17
$0.20705$0.00$0.00$0.00$0.20705/per share
01-25-17
01-27-17
01-31-17
$0.1843$0.00$0.00$0.00$0.1843/per share
12-23-16
12-28-16
12-30-16
$0.2528$0.00$0.00$0.00$0.2528/per share
11-23-16
11-28-16
11-30-16
$0.2176$0.00$0.00$0.00$0.2176/per share
10-25-16
10-27-16
10-31-16
$0.2101$0.00$0.00$0.00$0.2101/per share
09-26-16
09-28-16
09-30-16
$0.2181$0.00$0.00$0.00$0.2181/per share
08-25-16
08-29-16
08-31-16
$0.2129$0.00$0.00$0.00$0.2129/per share
07-25-16
07-27-16
07-29-16
$0.2168$0.00$0.00$0.00$0.2168/per share
06-24-16
06-28-16
06-30-16
$0.1447$0.00$0.00$0.00$0.1447/per share
05-24-16
05-26-16
05-31-16
$0.1387$0.00$0.00$0.00$0.1387/per share
04-25-16
04-27-16
04-29-16
$0.1370$0.00$0.00$0.00$0.1370/per share
03-24-16
03-29-16
03-31-16
$0.1893$0.00$0.00$0.00$0.1893/per share
02-23-16
02-25-16
02-29-16
$0.2078$0.00$0.00$0.00$0.2078/per share
01-25-16
01-27-16
01-29-16
$0.2035$0.00$0.00$0.00$0.2035/per share

To view HYLD's complete distribution history, please click here.

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Why Invest in HYLD

  • Active Management Strategy - Peritus has an active management strategy, concentrating on the securities they feel offer the best value relative to risk within the company's capital structure. With this strategy, Peritus can address the deficiencies of many of the high yield indexes and index-based products, which don't focus on credit analysis to determine the viability of a credit or industry or sell over-valued names. With this active strategy, they can work to avoid industries and securities they believe may face trouble going forward and position themselves for a given macroeconomic environment and outlook.
  • Unconstrained Investing - Peritus places limited value on the rating agencies and their backward looking methodologies, yet it seems many fixed income investors continue to use ratings as one of their primary investment tools. Additionally, many funds are subject to arbitrary restrictions, such as tranche size constraints, that can limit their investment universe. Peritus believe that these arbitrary restrictions can hinder investment performance.
  • Disciplined Investment Process - Peritus’ investment ideas, themes, and research are generated internally, allowing them to search for value and avoid popular trends. Through their fundamental credit and valuation analysis, Peritus pays particular attention to businesses they see as providing an “essential” product or service, having the ability to generate free cash flow, having a manageable capital structure and/or having hard asset values that are not being reflected in the bond pricing.

5 Key Attributes

  1. Income - Peritus seeks a portfolio generating a high current income largely provided by corporate debt, focusing on the non-investment grade debt market, which typically has higher coupon cash flow yield than other asset classes, including U.S. Treasuries, investment grade bonds, and municipals.
  2. Capital Gains Potential - Peritus primarily focuses on the “secondary” market, often investing in assets at a discount to par ($100), allowing for a potential opportunity to generate capital gains in addition to current yield.
  3. Focused Diversification - The Peritus team lets the value they see in the market dictate the portfolio’s diversification, rather than accepting securities that are viewed as less desirable for the sake of diversification. While still broadly diversified across various industries and securities, HYLD’s portfolio is expected to be more focused and concentrated than many of the larger funds.
  4. Short Duration/Maturity Profile - High yield bonds are typically issued with a maturity of five to ten years, but because Peritus primarily focuses on seasoned credits, their stated duration and maturity tend to be shorter than that of the market indexes, while their actual duration is generally even shorter due to early refinancings and take-outs via calls, poison puts, and tenders. Additionally, Peritus invests a portion of the portfolio in floating rate loans, which helps reduce the fund duration even further.
  5. Expertise - Peritus’ core team averages over 20 years each of in managing high yield corporate bonds and floating rate bank loans through various market cycles. In addition, Peritus’ management team has cultivated many important trading relationships over decades on Wall Street which they view as crucial to execution in the asset class.

About the Portfolio Managers

Timothy Gramatovich, Chief Investment Officer
Mr. Gramatovich, co-founder of Peritus, has 30 years of experience directly involved in the high yield asset class. As the Chief Investment Officer, he leads the investment committee and is responsible for developing investment strategies, themes, and ideas. Prior to co-founding Peritus, Mr. Gramatovich was a Portfolio Manager with Smith Barney’s Asset Management Division in Los Angeles, where he managed high yield portfolios for high net worth individuals and institutions. He began his career with Drexel Burnham Lambert in 1984, assisting in the development and marketing of high yield corporate debt management products. Mr. Gramatovich is a Chartered Financial Analyst (“CFA”) charter holder and a member of the CFA Institute. He is a graduate of the New York Institute of Finance.

Ronald Heller, CEO & Senior Portfolio Manager
Mr. Heller, co-founder of Peritus, is the Senior Portfolio Manager, overseeing portfolio management and trading activities. With over 20 years in the industry, Mr. Heller has developed long standing relationships with dealers across Wall Street for new issue and secondary trading. He began his career in finance in 1993 with Smith Barney. Prior to Mr. Heller’s investment career, he had a seven year career in the National Football League with San Francisco, Atlanta and Seattle, retiring in 1993. Mr. Heller attended Oregon State University majoring in Kinesiology.

Dave Flaherty, Senior Portfolio Manager
Mr. Flaherty joined the Sub-Advisor in November of 2004 and is responsible for assisting with the oversight of the Sub-Advisor’s portfolio management and trading activities. Along with Mr. Heller, Mr. Flaherty and the trading group facilitate the sourcing of investment product assuring that the Sub-Advisor’s strategy is properly executed in the portfolios and that the clients received the best execution with all trades. Mr. Flaherty graduated from Westmont College in 2003, where he majored in Economics and Business.

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Manager Minutes, August 2017

AlphaCall, November 2017

Price History

As of: 12/14/2017
NAV$36.75Closing Price$36.22
Change0Change$0.04
Shares Outstanding4,300,000Volume8,675
4PM Bid/Offer Midpoint$36.21Premium/Discount$-0.54
Assets Under Management$158,045,546.03
Premium/Discount Historical Data

Holdings

As of: 12/14/2017

 

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 Basics

  • Symbol

    HYLD

  • Exchange

    NYSE Arca

  • Inception Date

    11/30/2010

  • CUSIP

    00768Y503

  • Indicative Value

    HYLD.IV

  • Options

    Yes

Fees & Expenses

  • Management Fee

    1.10%

  • Other Expenses

    0.14%

  • Acquired Fund Fees

    0.01%

  • Gross Expense Ratio

    1.25%

  • Net Expense Ratio

    1.25%