Pring
Turner Business Cycle ETF
(NYSE Arca Ticker: DBIZ)
SUMMARY PROSPECTUS – October 28,
2013
Before you invest in the AdvisorShares
Fund, you may want to review the Fund’s prospectus and statement of additional information, which contain more information
about the Fund and the risks of investing in the Fund. The Fund’s current prospectus and statement of additional information,
each dated October 28, 2013, as supplemented from time to time, are incorporated by reference into this summary prospectus. You
can find the Fund’s prospectus and statement of additional information, as well as other information about the Fund, online
at http://advisorshares.com/fund/dbiz. You may also obtain this information at no charge by calling 877.THE.ETF1 (
877.843.3831)
or by sending an email request to info@advisorshares.com.
INVESTMENT
OBJECTIVE
The Pring Turner Business Cycle ETF (the
“Fund”) seeks long-term total return from capital appreciation and income.
FUND
FEES AND EXPENSES
This table describes the fees and expenses
that you may pay if you buy and hold shares of the Fund. Most investors will incur customary brokerage commissions when buying
or selling shares of the Fund, which are not reflected in the table below.
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SHAREHOLDER FEES
(fees paid directly from your investment)
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None
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ANNUAL FUND OPERATING
EXPENSES
(expenses that you
pay each year as a percentage of the value of your investment)
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MANAGEMENT FEES
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1.00
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%
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DISTRIBUTION (12b-1) FEES
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0.00
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%
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OTHER EXPENSES
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3.70
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%
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ACQUIRED FUND FEES AND EXPENSES
(a)
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|
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0.12
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%
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TOTAL ANNUAL FUND OPERATING EXPENSES
(b)
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4.82
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%
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FEE WAIVER AND/OR EXPENSE REIMBURSEMENT
(c)
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3.21
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%
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TOTAL ANNUAL FUND OPERATING EXPENSES AFTER FEE WAIVER AND/OR EXPENSE REIMBURSEMENT
(b)
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|
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1.61
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%
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(a)
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As a shareholder in certain exchange-traded funds
(the “Acquired Funds”), the Fund will indirectly bear its proportionate share of the fees and expenses of the Acquired
Funds. “Acquired Fund Fees and Expenses” do not reflect the operating expenses of exchange-traded products in which
the Fund invests that are not investment companies, including exchange-traded notes and certain exchange-traded pooled investment
vehicles not registered pursuant to the Investment Company Act of 1940, as amended (the “1940 Act”).
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(b)
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The Total Annual Fund Operating Expenses and Total
Annual Fund Operating Expenses After Fee Waiver and/or 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.”
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(c)
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AdvisorShares Investments, LLC (the “Advisor”)
has contractually agreed to reduce its fees and/or reimburse expenses in order 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 1.49% of the Fund’s average daily net assets for at least a year from the date of this Prospectus.
The expense limitation agreement may be terminated, without payment of any penalty, (i) by the Trust, for any reason and at any
time and (ii) by the Advisor, for any reason, upon ninety (90) days’ prior written notice to the Trust at its principal
place of business, such termination to be effective as of the close of business on the last day of the then-current one-year period.
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EXAMPLE
This Example is intended to help you compare
the cost of investing in the shares of the Fund with the cost of investing in other funds. This Example does not take into account
creation or redemption transaction fees, or the brokerage commissions that you pay when purchasing or selling shares of the Fund.
If these fees and commissions were included, your costs would be higher.
The Example assumes that you invest $10,000
in the Fund for the time periods indicated and then sell all of your shares at the end of those periods. The Example also assumes
that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
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|
1 YEAR
|
3 YEARS
|
5 YEARS
|
10 YEARS
|
|
Pring Turner Business Cycle ETF
|
$
164
|
$
1,162
|
$
2,164
|
$
4,685
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PORTFOLIO TURNOVER
The Fund pays transaction costs,
such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover
may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs,
which are not reflected in Total Annual Fund Operating Expenses or in the Example, affect the Fund’s performance. This rate
excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund’s
shares. For the period from December 18, 2012, the Fund’s commencement of operations, through the most recent fiscal year
ended June 30, 2013, the Fund’s portfolio turnover rate was 26% of the average value of its portfolio.
PRINCIPAL
INVESTMENT STRATEGIES
The overriding investment goal of the Fund
is to protect the value of the Fund’s portfolio during unfavorable market conditions and to grow the value of the Fund’s
portfolio in favorable market conditions. Utilizing its proprietary business cycle research, Pring Turner Capital Group (the “Sub-Advisor”)
proactively changes the Fund’s asset allocation and sector emphasis in seeking to minimize the Fund’s portfolio risk
and to optimize portfolio returns throughout the business cycle. The Sub-Advisor will invest the Fund’s portfolio in securities
that provide diversified exposure to the three primary asset classes (
i.e.
, stocks, bonds and commodities) across a wide
range of economic sectors.
In seeking its objective, the Fund may
invest in U.S. and foreign equity securities, including common and preferred stock, American Depositary Receipts (“ADRs”),
high quality corporate debt securities (rated BBB or higher), affiliated and unaffiliated exchange-traded funds (“ETFs”),
exchange-traded notes (“ETNs”), and cash and cash equivalents. The Fund may invest in securities of any capitalization
range and in any market sector at any time as necessary to seek to achieve the Fund’s investment objective.
PRINCIPAL
RISKS OF INVESTING IN THE FUND
The Fund is subject to a number of risks
that may affect the value of its shares, including:
American Depositary Receipt (ADR) Risk.
ADRs have the same currency and economic risks as the underlying non-U.S. shares they represent. They are affected by the risks
associated with non-U.S. securities, such as changes in political or economic conditions of other countries and changes in the
exchange rates of foreign currencies. In addition, investments in ADRs may be less liquid than the underlying securities in their
primary trading market.
Commodities Risk.
The Fund’s
exposure to the commodities markets may subject the Fund to greater volatility than investments in traditional securities. The
value of commodities and commodity-linked financial instruments to which the Fund may be exposed may be affected by a variety of
factors, including natural disasters and political and regulatory developments.
Credit Risk.
The Fund is subject
to the risk that an issuer of a fixed income security, such as a corporate bond, may be unable or unwilling to make interest and
principal payments when due. The Fund is also subject to the related risk that the value of a fixed income security may decline
because of concerns about the issuer’s creditworthiness. Credit risk is heightened to the extent the Fund invests in high-yield
securities or junk bonds.
Early Closing Risk.
An unanticipated
early closing of the NYSE Arca, Inc. (the “Exchange”) may result in a shareholder’s inability to buy or sell
shares of the Fund on that day.
Equity Risk.
The prices of equity
securities rise and fall daily. These price movements may result from factors affecting individual issuers, industries or the stock
market as a whole. In addition, equity markets tend to move in cycles which may cause stock prices to fall over short or extended
periods of time.
Exchange-Traded Vehicle Risk.
The
Fund may invest in (or short) ETFs, ETNs and other exchange-traded products (collectively, “ETPs”). Through its positions
in ETPs, the Fund will be subject to the risks associated with such ETP’s investments, or reference assets in the case of
ETNs, including the possibility that the value of the securities or instruments held by an ETP or an ETN’s reference assets
could decrease (or increase in the case of short positions). An ETP’s lack of liquidity can result in its value being more
volatile than the underlying portfolio investment or reference asset. In addition, certain of the ETPs may hold common portfolio
positions, thereby reducing any diversification benefits.
Exchange-Traded Note (ETN) Risk.
ETNs are senior, unsecured unsubordinated debt securities issued by an underwriting bank that are designed to provide returns that
are linked to a particular benchmark less investor fees. ETNs have a maturity date and generally, are backed only by the creditworthiness
of the issuer. As a result, the value of an ETN may be influenced by time to maturity, level of supply and demand for the ETN,
volatility and lack of liquidity in the underlying market (
e.g
., the commodities market), changes in the applicable interest
rates, and changes in the issuer’s credit rating and economic, legal, political or geographic events that affect the referenced
market. ETNs also may be subject to commodities market risk and credit risk.
Fixed Income Risk.
The market value
of fixed income investments in which the Fund may invest may change in response to interest rate changes and other factors. During
periods of falling interest rates, the value of outstanding fixed income securities generally rise. Conversely, during periods
of rising interest rates, the value of fixed income securities generally decline.
Foreign Investment Risk.
The Fund’s
investments in securities of foreign issuers, including ADRs, may involve certain risks that are greater than those associated
with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory
and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements
and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market
structures; and higher transaction costs.
Investment Risk.
As with all investments,
an investment in the Fund is subject to investment risk. Investors in the Fund could lose money, including the possible loss of
the entire principal amount of an investment, over short or even long periods of time.
Liquidity Risk.
Liquidity risk exists
when particular Fund investments are difficult to purchase or sell. This can reduce the Fund’s returns because the Fund may
be unable to transact at advantageous times or prices.
Management Risk.
The Sub-Advisor
continuously evaluates the Fund’s holdings, purchases and sales with a view to achieving the Fund’s investment objective.
However, the achievement of the stated investment objective cannot be guaranteed. The Sub-Advisor’s judgment about the markets,
the economy, or companies may not anticipate actual market movements, economic conditions or company performance, and these judgments
may affect the return on your investment.
Market Risk.
Due to market conditions,
the value of the Fund’s investments may fluctuate significantly from day to day. This volatility may cause the value of your
investment in the Fund to decrease.
Premium-Discount Risk.
The Fund’s
shares may trade above or below their net asset value (“NAV”). The trading price of the Fund’s shares may deviate
significantly from their NAV during periods of market volatility.
Tax Risk.
In order to qualify for
the favorable U.S. federal income tax treatment accorded to regulated investment companies (“RICs”), the Fund must
derive at least 90% of its gross income in each taxable year from certain categories of income (“qualifying income”).
Certain of the Fund’s investments may generate income that is not qualifying income. If the Fund were to fail to meet the
qualifying income test and fail to qualify as a RIC, it would be taxed in the same manner as an ordinary corporation, and distributions
to its shareholders would not be deductible by the Fund in computing its taxable income.
Trading Risk.
Although the Fund’s
shares are currently listed on the Exchange, there can be no assurance that an active trading market for shares will develop or
be maintained. In addition, trading in shares of the Fund may be halted because of market conditions or for reasons that, in view
of the Exchange, make trading in shares inadvisable.
As with any fund, there is no guarantee
that the Fund will achieve its investment objective.
Fund
Performance
A comparison of the Fund’s performance
with that of a broad measure of market performance may give some indication of the risks of an investment in the Fund; however,
the Fund is new and, therefore, does not have a performance history for a full calendar year. Of course, once the Fund has performance,
this past performance (before and after taxes) does not necessarily indicate how the Fund will perform in the future.
Updated performance information is available
on the Fund’s website at www.advisorshares.com.
MANAGEMENT
|
Name
|
Title
|
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AdvisorShares Investments, LLC
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Advisor
|
|
Pring Turner Capital Group
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Sub-Advisor
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PORTFOLIO MANAGERS
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Name and Title
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Length of Service with Sub-Advisor
|
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Joe D. Turner, President and Portfolio Manager
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since 1992
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Tom J. Kopas,
Chief Executive Officer and Portfolio Manager
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since 2002
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Jim W. Kopas, CFA, Associate Portfolio Manager and Assistant Compliance Officer
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since 2009
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PURCHASE
AND SALE OF FUND SHARES
The Fund issues and redeems shares on a
continuous basis at their NAV
only
in a large specified number of shares called a “Creation Unit.” The shares
of the Fund that trade on the Exchange are “created” at their NAV by market makers, large investors and institutions
only in block-size Creation Units of at least 25,000 shares. A “creator” enters into an authorized participant agreement
(“Participant Agreement”) with the Distributor or uses a Depository Trust Company (“DTC”) participant who
has executed a Participant Agreement (an “Authorized Participant”), and deposits into the Fund a portfolio of securities
closely approximating the holdings of the Fund and a specified amount of cash, together totaling the NAV of the Creation Unit(s),
in exchange for 25,000 shares of the Fund (or multiples thereof).
Individual Fund shares may only be purchased
and sold in secondary market transactions through brokers.
The shares of the Fund are listed on the Exchange, and because
shares trade at market prices rather than at NAV, shares may trade at a value greater than or less than their NAV.
TAX
INFORMATION
The Fund intends to make distributions
that may be taxed as ordinary income, qualified dividend income or capital gains (or a combination thereof), unless you are investing
through a tax-deferred arrangement such as a 401(k) plan or an individual retirement account (“IRA”).
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
Investors purchasing
shares in the secondary market through a brokerage account or with the assistance of a broker may be subject to brokerage commissions
and charges.
If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a bank),
the Fund, the Advisor or the Sub-Advisor may pay the intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing broker-dealers or other intermediaries and your salesperson to recommend the Fund
over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.
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