He's certainly been impressing people, as his AUM has gone up nicely to where it is now about $100MM in the fund. The stock started out at 25 NAV in the beginning of the year, and got sucked down to about 21.22 NAV at the height of bull market in April. That's pretty good risk management, I'd say. But then as the market started to unravel, the fund started to seriously outperform. They were short all of the high-profile casualties, like BAC. When everything went to hell, the NAV eventually reached as high as 32.50. Right now, it's around 27.40.
Before taking over at advisorshares, the manager ran a fundamentals-based short portfolio for a billionaire Texas Oil Tycoon in the Dallas/FtWorth area. The strategy he is using seems to work pretty consistently. By searching for companies that are playing accounting games, you tend to find all the crap. That's too much work for any one of us to do, and also too stressful given that you have to monitor the positions 24-7 to protect against squeezes and mo-mo rallies, that's why it's great to hand it over to an expert. Then, we can focus on finding good longs to offset the hedge, or on diagnosing the overall market trend if we want to go without longs and go net short.
Personally, I hate going short individual names because I'm constantly obsessing over the position, checking it, wondering whether to cover, etc. With HDGE, I just let it ride.
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