Noah Hamman is chief executive officer of AdvisorShares Investments LLC, a Washington, D.C.-based exchange-traded funds provider. Before starting the firm in late 2006, he was vice president of business development at Rydex Investments.

The start-up company recently sold a 60% stake to Fund.com, a New York-based over-the-counter public asset manager and educational content provider. It trades with the ticker symbol of FNDM. IndexUniverse's Managing Editor Murray Coleman recently caught up with Hamman to discuss events surrounding his company and active ETFs.

IndexUniverse: Why did you sell a majority interest in AdvisorShares?

Hamman: There were two reasons. One was to find a financial partner for the business. Fund.com is also relatively new, but they're very well-financed. The second part was about trying to work with someone who can integrate our business model and create a strong fit for both.

IU: AdvisorShares is strictly an actively managed ETF provider, isn't it?

Hamman: Yes, and we've got two ETFs currently under registration at the moment. One is designed to rotate around different sectors in the marketplace, depending on a specific subadvisor's style and methodology. The second one is a country rotation fund, which will shift between emerging and developed markets around the world—including the U.S. So it's a truly global ETF strategy. And each can use other underlying ETFs, so each will be an ETF-of-ETFs.  But we expect to register more products that will employ a number of different strategies, both in terms of ETFs-of-ETFs as well as more traditional ETFs comprised of different stocks. Our plan is to work with a broad range of subadvisors. A single ETF could have multiple subadvisors with an overlay manager around it.

IU: How close are you to getting a green light for these from the Securities and Exchange Commission?

Hamman: I would assume we're close. We've been in line for awhile, and from my days at Rydex, I certainly understand that it isn't always a quick process. But I do believe we're within a week or two of getting it, based on the feedback we're receiving from the SEC.

IU: These first two ETFs are built as retail strategies, aren't they?

Hamman:  Yes, but we plan in the future to launch hedging-like strategies and more sophisticated types of ETFs that will attract some institutional interest.

IU: Will these be truly actively managed?

Hamman: Yes, and I say that because there's nothing in our exemptive relief that limits how much our subadvisors can trade. So we don't want to change how a manager normally conducts transactions. We plan on working with existing mutual fund managers as well as emerging managers in separate accounts or other types of portfolios. In fact, we expect to work with some hedge fund managers at some point. These ETFs won't be a whole lot different than existing actively managed fund strategies found in other investment vehicles.

Previous Page

1  |  2

Next Page