AdvisorShares

AdvisorShares Investments is a US-based investment management firm based in Bethesda, Maryland, which offers actively managed exchange-traded funds (ETFs) through the AdvisorShares Trust. AdvisorShares partners with third party financial advisers who already manage clients’ assets to package their investment strategy using exchange-traded funds. As part of promoting its funds it also provides educational support to help financial advisors and investors understand actively managed ETFs and their underlying investment strategies.

Three former Rydex employees, Noah Hamman, Jacob Griffith and Joseph Barrato founded Arrow Funds in February 2006. Less than seven months after starting Arrow, in August 2006 Noah Hamman, while still acting as the CEO of Arrow Funds, established a separate company called AdvisorShares, allegedly without the knowledge of his two partners. The partners said this was a "violation to his fiduciary duty to Arrow [...] Hamman then systematically diverted to the benefit of himself and AdvisorShares opportunities, assets, and contracts that rightfully belonged to Arrow. [...] When Arrow began to learn of Hamman's competing activities and confronted him regarding those activities, Hamman engaged in further deceptive misconduct by affirmatively misrepresenting the nature and scope of his endeavors on behalf of AdvisorShares". Hamman was fired by Arrow on November 29, 2007, after the Arrow Management Committee claims to have discovered more information about the nature of Hamman's competing activities.

On October 31, 2008, Fund.com purchased its 60% stake in AdvisorShares for an initial payment of $275,000.

On November 7, 2008, Arrow commenced arbitration proceedings against Hamman and AdvisorShares for usurping Arrow's intellectual property including its business plan in establishing AdvisorShares. In January 2009, Arrow Funds requested a hearing with the SEC to challenge AdvisorShares' application for exemptive relief filed the previous month. Arrow and their counsel claimed that Hamman "To enable the Application to proceed, deliberately thwarted and delayed the selection of the Arbitration tribunal members." This request to block the application for exemptive relief was denied on July 20, 2009. "On March 1, 2010, Mr. Hamman, Arrow and the Members agreed to settle the Arbitration"

On October 10, 2008, Noah Hamman petitioned (under §18-802 of the Delaware LLC Act) a Court in Delaware to dissolve Arrow Investment Advisors, LLC. He claimed that Arrow's managers had mismanaged the company and could not achieve the goals set forth in the original business plan. He alleged that Arrow's managers had: 1) "exposed the Company to liability by violating the particular federal securities laws and regulations under which the Company is required to operate, and have failed to seek appropriate supervision from the broker-dealer for the Company’s specific obligations as a FINRA-licensed representative" 2) "operated the Company for their own financial benefit, and have spent Company funds for their own private use and enjoyment, while paying wages to various employees in an erratic and tardy fashion." 3)"failed to provide to all members an annual operating plan for 2008 as required by the LLC Agreement". On April 23, 2009, the judge in the case dismissed the Petition with prejudice, as Hamman failed to provide factual evidence to back his claims and "Hamman was required to press his fiduciary claims in binding arbitration under the Arrow LLC Agreement". "Hamman suggests that merely stating these allegations, virtually without any factual support, is enough to survive a motion to dismiss. [...]Here, the Petition is devoid of any facts supporting Hamman’s first two allegations, such as which of the myriad federal securities laws Arrow must comply with were violated or for what improper personal purposes Barrato and Griffith used Arrow funds and approximately when and how much of Arrow’s funds they misused." The judge even speculated on a possible motivation for filing the suit: "And, although Hamman might be disappointed that he has been ousted from the management of a company he helped establish,"

The firm launched its first active ETF in 2009. By 2014 it had 24 active ETFs and $1.83 billion under management. By August 2023, it had 22 ETFs with an average expense ratio of 1.27% and $1.01 billion in assets under management.

In October 2012 Esposito Securities LLC sued AdvisorShares, claiming that the parties signed a mutual nondisclosure agreement and that subsequently Dan Ahrens, an officer of AdvisorShares, began sharing confidential information with Esposito's clients and told them not to do business with Esposito.

The fund Pacer Pacific Asset Floating Rate High Income ETF NYSE: FLRT was originally launched as an AdvisorShares' product called the AdvisorShares Pacific Asset Enhanced Floating Rate ETF on February 18, 2015. On December 27, 2019, the fund was reorganized as Pacific Global Senior Loan ETF.