NYSE Arca Ticker:
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Sub-advised
by: Newfleet
Asset Management |
ADVISORSHARES
TRUST 4800
Montgomery Lane ● Suite 150 Bethesda,
Maryland 20814 www.advisorshares.com 877.843.3831 Prospectus
dated November 1, 2021 |
This
Prospectus provides important information about the AdvisorShares Newfleet
Multi-Sector Income ETF, a series of AdvisorShares Trust. Before you
invest, please read this Prospectus and the Fund’s Statement of Additional
Information carefully and keep them for future reference. The
shares of the Fund have not been approved or disapproved by the U.S.
Securities and Exchange Commission nor has the U.S. Securities and
Exchange Commission passed upon the accuracy or adequacy of this
Prospectus. Any representation to the contrary is a criminal
offense. |
SHAREHOLDER FEES
(fees paid directly from
your investment) |
|
ANNUAL FUND OPERATING
EXPENSES
(expenses that you pay
each year as a percentage of the value of your
investment) | |
MANAGEMENT
FEES |
|
DISTRIBUTION
(12b-1) FEES |
|
OTHER
EXPENSES |
|
ACQUIRED
FUND FEES AND EXPENSES
(a) |
|
TOTAL ANNUAL OPERATING
EXPENSES |
|
FEE
WAIVER/EXPENSE REIMBURSEMENT
(b) |
- |
TOTAL ANNUAL OPERATING
EXPENSES AFTER FEE WAIVER/EXPENSE REIMBURSEMENT |
|
(a) |
Total Annual Operating
Expenses and Total Annual Operating Expenses After Fee Waiver/Expense
Reimbursement in this fee table may not correlate to the expense ratios in
the Fund’s financial highlights (and the Fund’s financial statements)
because the financial highlights include only the Fund’s direct operating
expenses and do not include Acquired Fund Fees and Expenses, which
represent the Fund’s pro rata share of the fees and expenses of money
market funds in which it invested as a temporary defensive
measure. |
(b) |
AdvisorShares
Investments, LLC (the “Advisor”) has contractually agreed to waive its
fees and/or reimburse expenses to keep net expenses (excluding amounts
payable pursuant to any plan adopted in accordance with Rule 12b-1,
interest expense, taxes, brokerage commissions, acquired fund fees and
expenses, other expenditures which are capitalized in accordance with
generally accepted accounting principles, and extraordinary expenses) from
exceeding 0.75% of the Fund’s average daily net assets |
1 |
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1
YEAR |
3
YEARS |
5
YEARS |
10
YEARS |
AdvisorShares Newfleet
Multi-Sector Income ETF |
$ |
$ |
$ |
$ |
● |
Securities
issued or guaranteed as to principal and interest by the U.S. Government,
its agencies, authorities or instrumentalities, including collateralized
mortgage obligations (“CMOs”), real estate mortgage investment conduits
(“REMICs”) and other pass-through securities; |
● |
Debt
securities issued by foreign issuers, including foreign governments and
their political subdivisions and issuers in emerging
markets; |
● |
Investment-grade
securities issued primarily by U.S. issuers and secondarily by non-U.S.
issuers; and |
● |
High-yield
debt instruments, including bank loans, which are generally floating-rate
loans. |
2 |
3 |
4 |
|
Return |
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Quarter/
Ye ar |
Highest
Return |
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Lowest
Return |
- |
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ADVISORSHARES NEWFLEET
MULTI-SECTOR INCOME ETF |
1 Year |
|
5 Years |
|
Since Inception
( |
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Name |
Title |
AdvisorShares
Investments, LLC |
Advisor |
Newfleet
Asset Management, LLC |
Sub-Advisor |
5 |
Name and
Title |
Length of Service with
Sub-Advisor |
David L. Albrycht,
CFA, President and Chief
Investment Officer |
since
June 2011 |
Benjamin Caron,
CFA, Senior Managing
Director and Portfolio Manager |
since
June 2011 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
● |
the
Fund makes distributions; |
● |
you
sell Fund shares; and |
● |
you
purchase or redeem Creation Units (authorized participants
only). |
|
● |
The
Fund intends to distribute, at least annually, substantially all of its
net investment income and net capital gains
income. |
|
● |
The
Fund’s distributions from income and net short-term capital gains will
generally be taxed to you as ordinary income. For non-corporate
shareholders, dividends reported by the Fund as qualified dividend income
are generally eligible for reduced tax rates applicable to long-term
capital gains, provided holding period and other requirements are
met. Qualified dividend income generally is income derived from
dividends paid by U.S. corporations or certain foreign corporations that
are either incorporated in a U.S. possession or eligible for tax benefits
under certain U.S. income tax treaties. In addition, dividends that the
Fund receives in respect of stock of certain foreign corporations may be
qualified dividend income if that stock is readily tradable on an
established U.S. securities market. For such dividends to be taxed as
qualified dividend income to a non-corporate shareholder, the Fund must
satisfy certain holding period requirements with respect to the underlying
stock and the non-corporate shareholder must satisfy holding period
requirements with respect to his or her ownership of the Fund’s
shares. Holding periods may be suspended for these purposes for
stock that is hedged. The Fund’s investment strategies will
significantly limit its ability to distribute dividends eligible for
treatment as qualified dividend
income. |
15 |
|
● |
Corporate
shareholders may be entitled to a dividends received deduction for the
portion of dividends they receive that are attributable to dividends
received by the Fund (directly or in some cases indirectly) from U.S.
corporations, subject to certain limitations. The Fund’s
investment strategies will significantly limit its ability to distribute
dividends eligible for the dividends received deduction for corporate
shareholders. |
|
● |
Taxes
on distributions of capital gains (if any) are determined by how long the
Fund owned the investments that generated them, rather than how long a
shareholder has owned their shares. Sales of assets held by the Fund for
more than one year generally result in long-term capital gains and losses,
and sales of assets held by the Fund for one year or less generally result
in short-term capital gains and losses. Distributions from the Fund’s
short-term capital gains are generally taxable as ordinary income.
Any distributions of net capital gain (the excess of the Fund’s net
long-term capital gains over its net short-term capital losses) that you
receive from the Fund generally are taxable as long-term capital gains
regardless of how long you have owned your shares. Long-term
capital gains are taxed to non-corporate shareholders at reduced tax
rates. |
|
● |
Although
the Fund may invest in municipal bonds (the interest upon which would be
exempt from U.S. federal income tax if received by shareholders directly),
Fund distributions attributable to that interest are not expected to be
exempt from U.S. federal income tax. |
|
● |
Dividends
and distributions are generally taxable to you whether you receive them in
cash or reinvest them in additional shares. |
|
● |
In
general, your distributions are subject to federal income tax for the year
in which they are paid. However, distributions paid in January but
declared by the Fund in October, November or December of the previous year
may be taxable to you in the previous year. |
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● |
Under
recently issued final Treasury Regulations, a RIC that receives business
interest income may pass through its net business interest income for
purposes of the tax rules applicable to the interest expense limitations
under Section 163(j) of the Internal Revenue Code. A RIC’s total “Section
163(j) Interest Dividend” for a tax year is limited to the excess of the
RIC’s business interest income over the sum of its business interest
expense and its other deductions properly allocable to its business
interest income. A RIC may, in its discretion, designate all or a portion
of ordinary dividends as Section 163(j) Interest Dividends, which would
allow the recipient shareholder to treat the designated portion of such
dividends as interest income for purposes of determining such
shareholder’s interest expense deduction limitation under Section 163(j).
This can potentially increase the amount of a shareholder’s interest
expense deductible under Section 163(j). In general, to be eligible to
treat a Section 163(j) Interest Dividend as interest income, you must have
held your shares in the Fund for more than 180 days during the 361-day
period beginning on the date that is 180 days before the date on which the
share becomes ex-dividend with respect to such dividend. Section 163(j)
Interest Dividends, if so designated by the Fund, will be reported to your
financial intermediary or otherwise in accordance with the requirements
specified by the Internal Revenue Service. |
|
● |
Shortly
after the close of each calendar year, the Fund (or your broker) will
inform you of the amount of your ordinary income dividends and net capital
gain distributions received from the Fund. |
● |
You
may wish to avoid investing in the Fund shortly before a dividend or other
distribution, because such a distribution will generally be taxable even
though it may economically represent a return of a portion of your
investment. |
16 |
17 |
18 |
AdvisorShares Newfleet
Multi-Sector Income ETF |
|
Years Ended June
30, |
| |||||||||||||||||
2021 |
|
|
2020 |
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2019 |
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2018 |
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2017 |
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Selected Data for a Share of Capital Stock
Outstanding |
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Net Asset Value, Beginning of
Year/Period |
|
$ |
48.14 |
|
|
$ |
48.44 |
|
|
$ |
47.86 |
|
|
$ |
48.68 |
|
|
$ |
48.83 |
|
Investment Operations |
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Net
Investment Income
(1) |
|
|
0.78 |
|
|
|
1.21 |
|
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|
1.35 |
|
|
|
1.05 |
|
|
|
0.74 |
|
Net Realized and Unrealized Gain
(Loss) |
|
|
0.83 |
|
|
|
(0.22 |
) |
|
|
0.65 |
|
|
|
(0.62 |
) |
|
|
0.38 |
|
Distributions of Net Realized Gains by other
investment companies |
|
|
— |
|
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|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.00 |
(6) |
Net
Increase in Net Assets Resulting from Investment Operations
(2) |
|
|
1.61 |
|
|
|
0.99 |
|
|
|
2.00 |
|
|
|
0.43 |
|
|
|
1.12 |
|
Distributions from Net Investment
Income |
|
|
(0.90 |
) |
|
|
(1.29 |
) |
|
|
(1.42 |
) |
|
|
(1.25 |
) |
|
|
(1.27 |
) |
Total Distributions |
|
|
(0.90 |
) |
|
|
(1.29 |
) |
|
|
(1.42 |
) |
|
|
(1.25 |
) |
|
|
(1.27 |
) |
Net Asset Value, End of Year/Period |
|
$ |
48.85 |
|
|
$ |
48.14 |
|
|
$ |
48.44 |
|
|
$ |
47.86 |
|
|
$ |
48.68 |
|
Market Value, End of Year/Period |
|
$ |
48.83 |
|
|
$ |
48.17 |
|
|
$ |
48.38 |
|
|
$ |
47.79 |
|
|
$ |
48.70 |
|
Total Return |
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|
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Total
Investment Return Based on Net Asset Value
(3) |
|
|
3.36 |
% |
|
|
2.10 |
% |
|
|
4.27 |
% |
|
|
0.87 |
% |
|
|
2.30 |
% |
Total
Investment Return Based on Market
(3) |
|
|
3.27 |
% |
|
|
2.28 |
% |
|
|
4.29 |
% |
|
|
0.70 |
% |
|
|
2.37 |
% |
Ratios/Supplemental Data |
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Net Assets, End of Year/Period (000’s
omitted) |
|
$ |
96,959 |
|
|
$ |
57,767 |
|
|
$ |
75,080 |
|
|
$ |
155,529 |
|
|
$ |
258,005 |
|
Ratio to Average Net Assets of: |
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Expenses,
net of expense waivers and reimbursements
(4) |
|
|
0.75 |
% |
|
|
0.75 |
% |
|
|
0.75 |
% |
|
|
0.75 |
% |
|
|
0.75 |
% |
Expenses,
prior to expense waivers and reimbursements
(4) |
|
|
0.78 |
% |
|
|
0.82 |
% |
|
|
0.96 |
% |
|
|
0.84 |
% |
|
|
0.80 |
% |
Net
Investment Income
(4) |
|
|
1.61 |
% |
|
|
2.51 |
% |
|
|
2.81 |
% |
|
|
2.17 |
% |
|
|
1.53 |
% |
Portfolio
Turnover Rate
(5) |
|
|
95 |
% |
|
|
63 |
% |
|
|
40 |
% |
|
|
66 |
% |
|
|
63 |
% |
(1) |
Based on average shares
outstanding. |
(2) |
The amount shown for a share distribution
throughout the period may not correlate with the Statement of Operations
for the period due to the timing of sales and repurchases of Fund Shares
in relation to income earned and/or fluctuating fair value of the
investments of the Fund. |
(3) |
Net asset value total investment return is
calculated assuming an initial investment made at the net asset value at
the beginning of the period, reinvestment of all dividends and
distributions on ex-date, if any, at net asset value during the period,
and redemption on the last day of the period. Periods less than one year
are not annualized. Market value total return is calculated assuming
an initial investment made at the market value at the beginning of the
period, reinvestment of all dividends and distributions at market value
during the period on pay date, and sale at the market value on the last
day of the period. |
(4) |
Ratios of periods of less than one year have
been annualized. Excludes expenses incurred by the underlying investments
in other funds. |
(5) |
Portfolio turnover rate is not annualized and
excludes the value of portfolio securities received or delivered as
in-kind creations or redemptions of the Fund’s capital
shares. |
(6) |
Amount represents less than $0.005 or
0.005%. |
19 |
Advisor |
AdvisorShares Investments,
LLC 4800
Montgomery Lane, Suite 150 Bethesda,
Maryland 20814 |
Sub-Advisor |
Newfleet Asset Management,
LLC One
Financial Plaza Hartford,
Connecticut 06103 |
Distributor |
Foreside Fund Services,
LLC Three
Canal Plaza, Suite 100 Portland,
Maine 04101 |
Legal
Counsel |
Morgan, Lewis &
Bockius LLP 1111
Pennsylvania Avenue, NW Washington,
DC 20004 |
Administrator,
Custodian & Transfer Agent |
The Bank of New York
Mellon 240
Greenwich Street New
York, New York 10286 |
20 |