Actively managed exchange traded funds are still just a sliver of the overall ETF universe, but at least one issuer is fulfilling the role of upstart among sponsors of active ETFs.
Barely more than a year after breaking into the ETF market with 10 actively managed funds, WBI Investments is now the fifth-largest of active ETFs, according to the AdvisorShares Active ETF Report for the month ending August 31. For the week ended September 4, WBI Investments had $1.49 billion in active ETF assets under management, according to AdvisorShares data.
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Only Pimco, First Trust, iShares and State Street Global Advisors have more actively managed ETF assets under management than does New Jersey-based WBI Investments.
The WBI Tactical Income Shares (NYSE:WBII) is oneof the primary drivers of WBI's ascent up the ranks of active issuers. Like its nine other stablemates, WBII debuted in August 2014 and the fund now has over $322.5 million in assets under management, making it the 15th-largest actively managed ETF.
WBII proved durable in weathering the recent market storm because as of August 25, the ETF allocated over 84 percent of its weight to corporate bonds and U.S. government debt.
For the second quarter and third quarter through August 25, WBII produced a total net return of +0.39%, outpacing the U.S. equity markets return of -8.94%, based on the total return of the S&P 500 Index. Risk protection is clearly shown by examining the daily returns as the U.S. equity market declined precipitously on Thursday, August 20 through Tuesday, August 25. The average daily protection provided during this four-day market stress-test was +2.44% excess return per day, according to WBI Investments.
The WBI Tactical High Income Shares (NYSE:WBIH) is now the 20th-largest actively managed ETF. That ETF has nearly $230 million in assets under management.
WBIH seeks to provide investors with a wealth-building investment strategy that provides low volatility, low correlation and an optimal blend of bear market capital preservation and bull market return, according to WBIH.
WBIH's top 10 holdings include a 28.4 percent weight to short-term Treasurys, an almost four percent allocation to shares of Altria Group Inc. (NYSE:MO) and positions in eight fixed income ETFs, including preferred stock and high-yield corporate bond funds.
With September and October notoriously known for volatile market conditions, WBI Shares suite of 10 active ETFs aim to reduce volatility for investors. WBI Shares recently celebrated the first anniversary of their historic launch of 10 active ETFs, garnering $1 billion of assets under management on the first day of trading, said WBI in a statement.
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