AdvisorShares STAR Global Buy-Write ETF

The AdvisorShares STAR Global Buy-Write ETF (NYSE Arca: VEGA) is a low volatility, moderate risk, global balanced portfolio that strategically allocates to the capital markets, tactically overweights regions, sectors, or securities and employs option strategies to create additional sources of income for total return and enhancements to risk management. The Portfolio Manager writes (sells) covered call options against a portion of its underlying holdings creating option premium; generally, 50% to 75% of VEGA’s positions will have covered options. This extra source of income, along with the bond interest and equity dividends collected on the portfolio, can assist in hedging downside risk. This collective income stream also serves as the “funding source” for an internal systematic reinvestment strategy called Volatility Based Reinvestment (VBR). When equity volatility is high, as gauged by the VIX’s 200-day moving average, VEGA reinvests its cash positions back into the capital markets. When volatility is low, the Portfolio Manager may allocate a portion of VEGA’s cash position to protective put options for downside risk management. Over a market cycle, VEGA’s risk objective is 0.6 beta of the S&P 500 Index. While VEGA isn’t managed to a specific benchmark, the MSCI All Country World Index (ACWI) and the Bloomberg Barclays Aggregate Bond Index are appropriate for comparison purposes for the equity and fixed income portions of the portfolio, respectively.