AdvisorShares
| Company type | Private |
|---|---|
| Industry | Investment management |
| Founded | 2006 |
| Founder | Noah Hamman, Jacob Griffith, Joseph Barrato |
| Headquarters | Bethesda, Maryland , United States |
Area served | United States |
Key people | Noah Hamman (founder and former CEO) |
| Products | Actively managed exchange-traded funds (ETFs) |
AdvisorShares Investments is an investment management company based in the United States, with its main office located in Bethesda, Maryland. The firm specializes in offering actively managed exchange-traded funds (ETFs) through the AdvisorShares Trust. It partners with external financial advisers to transform their investment approaches into ETF products, while also providing educational resources aimed at helping both advisors and investors gain insight into actively managed ETFs and the strategies behind them.
History
Established in 2006 by Noah Hamman, Jacob Griffith, and Joseph Barrato—who previously worked at Rydex—the company originally operated under the name Arrow Funds. Within seven months of its inception, Hamman created AdvisorShares independently while remaining CEO of Arrow Funds, reportedly without informing his co-founders. This situation resulted in allegations that Hamman violated his fiduciary responsibilities by redirecting opportunities and assets from Arrow to his new venture. When these concurrent operations were discovered, Arrow dismissed Hamman in November 2007.
On October 31, 2008, Fund.com acquired a majority interest of 60% in AdvisorShares for $275,000, representing a key investment intended to support the firm’s expansion and organizational development.
Application for Exemptive Relief
On November 7, 2008, Arrow initiated arbitration proceedings against Noah Hamman and AdvisorShares, accusing them of misappropriating Arrow’s intellectual property and business plan during the establishment of AdvisorShares. In January 2009, Arrow Funds requested an SEC hearing to contest AdvisorShares' exemptive relief application submitted the previous month, alleging that Hamman "intentionally obstructed and delayed" the formation of the arbitration tribunal. This petition was rejected on July 20, 2009. The parties reached a settlement agreement on March 1, 2010.
Unsuccessful Petition for Dissolution of Arrow Investment Advisors
On October 10, 2008, Noah Hamman filed a petition in Delaware court seeking to dissolve Arrow Investment Advisors, LLC. He claimed that Arrow’s management had failed to achieve the business plan objectives and accused them of violating federal securities regulations, misappropriating company funds for personal use, and neglecting to provide a 2008 annual operating plan. The court dismissed this petition with prejudice on April 23, 2009, citing insufficient factual support and noting that fiduciary disputes were subject to binding arbitration under the LLC agreement. The judge observed that Hamman’s allegations lacked detailed evidence of regulatory breaches or fund misuse and suggested his motivation was influenced by being removed from leadership despite his role as a founder.
Other
AdvisorShares introduced its inaugural active ETF in 2009. By 2014, the firm managed a portfolio of 24 active ETFs totaling $1.83 billion in assets. As of August 2023, it operated 22 ETFs with assets under management amounting to $1.01 billion and maintained an average expense ratio of 1.27%.
In October 2012, Esposito Securities LLC brought a lawsuit against AdvisorShares alleging that Dan Ahrens, an officer at AdvisorShares, breached a nondisclosure agreement by sharing confidential information with Esposito’s clients and advising them against engaging with Esposito.
The ETF currently known as Pacer Pacific Asset Floating Rate High Income ETF (NYSE: FLRT) was initially launched by AdvisorShares on February 18, 2015, under the name AdvisorShares Pacific Asset Enhanced Floating Rate ETF. It underwent reorganization on December 27, 2019, becoming the Pacific Global Senior Loan ETF.
The DENT Tactical ETF (NYSE ticker: DENT)
Trading on the New York Stock Exchange commenced for the Dent Tactical ETF on September 15, 2009, identified by the symbol . This initial offering from AdvisorShares Investments was actively overseen by HS Dent Investment Management, LLC. The management team was headed by Harry S. Dent Jr., a financial author and founder, recognized for his economic analyses and development of The Dent Method.
Morningstar reported that as of July 2011, DENT carried a relatively high expense ratio of 1.5%. The fund ultimately terminated its operations in August 2012.
The Mars Hill Global Relative Value ETF (NYSE ticker: GRV)
The Mars Hill Global Relative Value ETF began trading on July 9, 2010, on the New York Stock Exchange under the ticker GRV. Managed by Mars Hill Partners, LLC, it was notable as the industry's first actively managed long/short ETF. Initial capital raised reached $38 million within the first month; however, investor interest diminished drastically, resulting in assets dropping to $3.2 million. On December 1, 2011, management shifted to Accuvest Global Advisors, which rebranded the fund as AdvisorShares Accuvest Global Long Short ETF (AGLS). AGLS ceased operations on August 7, 2015.
The Cambria Global Tactical ETF (NYSE ticker: GTAA)
The Cambria Global Tactical ETF launched on October 25, 2010, trading under GTAA and managed by Cambria Investment Management based in Los Angeles. The fund had a net expense ratio of 1.35%. Portfolio managers Mebane Faber and Eric Richardson utilized a trend-following strategy investing across multiple asset classes through underlying ETFs. Following the separation between Cambria and AdvisorShares on July 25, 2014, Cambria introduced a successor fund named Cambria Global Momentum ETF (GMOM), featuring a lower management fee of 0.59%. Morgan Creek Capital Management from North Carolina took over as GTAA’s sub-advisor until the fund closed on May 12, 2017.
The Global Echo ETF (NYSE ticker: GIVE) and Collaboration with Philippe Cousteau Jr.
AdvisorShares introduced the AdvisorShares Global Echo ETF (GIVE) in May 2012 with an emphasis on sustainable investment strategies. A portion of its 1.7% expense ratio—specifically 0.4%—was allocated to the Global Echo Foundation, co-founded by Philippe Cousteau Jr., which supports environmental preservation and social entrepreneurship initiatives benefiting women and children. Investors were not eligible for tax deductions related to this charitable fee component. The GIVE fund closed on May 17, 2017.
The Peritus High Yield ETF (NYSE ticker: HYLD)
AdvisorShares collaborated with Peritus Asset Management to launch the AdvisorShares Peritus High Yield ETF on December 1, 2010. As the first actively managed high yield bond ETF, HYLD was sub-advised by Peritus with CIO Tim Gramatovich managing alongside Ron Heller. By May 2014, assets under management for HYLD exceeded $1 billion. In December 2017, AdvisorShares authorized transferring HYLD from its trust to the Amplify ETF Trust effective in Q2 of 2018. Subsequently, on June 22, 2018, Exchange Traded Concepts and Eve Capital announced moving HYLD to the ETC ELF Trust.
The TrimTabs Float Shrink ETF (NYSE ticker: TTFS)
AdvisorShares introduced the AdvisorShares TrimTabs Float Shrink ETF on October 4, 2011, partnering with TrimTabs Investment Research. The fund, sub-advised by TrimTabs Asset Management, focused on equities exhibiting liquidity and fundamental characteristics associated with robust long-term performance. Charles Biderman, TrimTabs' CEO, acted as portfolio manager together with Minyi Chen.
In May 2016, AdvisorShares unexpectedly replaced TrimTabs as the TTFS manager—at that time overseeing roughly $178 million in assets under management—with Wilshire Associates. The fund was rebranded as the Wilshire Buyback ETF but continued to trade under the TTFS ticker. Prior to this transition, TTFS had achieved a five-star Morningstar rating and delivered annualized returns of 19.22% through March 2016, surpassing major benchmarks. Biderman publicly denounced his removal as unwarranted and subsequently launched a separately managed account employing his original investment approach.
By October 11, 2018, after assets diminished to about $88 million, AdvisorShares appointed DoubleLine Equity LP to manage the fund and renamed it the AdvisorShares DoubleLine Value Equity ETF, shifting its focus toward a fundamental value investment strategy. On September 1, 2022, with assets further reduced to $46 million, AdvisorShares substituted DoubleLine with a new manager and rebranded the fund as the AdvisorShares Insider Advantage ETF. This change reinstated Minyi Chen as portfolio strategist and returned the fund's emphasis to float shrink and stock buyback strategies.