The Fund is an actively managed exchange-traded fund (“ETF”) that seeks to achieve its investment objective by tactically investing in U.S. exchange listed equity securities, primarily consisting of common stock of large-, mid-, and small-capitalization companies. The Fund typically holds positions in each of these three market capitalizations and the allocation of assets to each individual stock within each market capitalization is typically equal weighted.

AdvisorShares Investments, LLC (the “Advisor”), the Fund’s investment adviser, allocates the Fund’s portfolio investments using research obtained from Let Bob, LLC (“Let Bob”), a smart-charting platform that incorporates fundamental and technical analysis with modern artificial intelligence capabilities. Let Bob has agreed to provide its proprietary artificial intelligence security selection process to the Advisor for purposes of managing the Fund. Beginning with a universe of companies representing the broad U.S. stock market, Let Bob’s proprietary and third-party machine learning algorithms identify stocks of companies demonstrating the highest momentum in public sentiment (i.e., sentiment momentum) as measured by their digital footprint as well as by momentum in their stock price. The Advisor also consults Let Bob’s proprietary macro (overall market or grouping) momentum and individual stock momentum strategy to determine when to move some or all of the Fund’s assets to cash or cash equivalents, as described below. Momentum is defined as the rate of acceleration of the price of a security or group of securities.

Sentiment momentum analysis utilizes a systematic quantitative research platform that combines a company’s digital performance data (data about the online interactions between customers and the websites and other digital properties of the company) with fundamental financial data (such as revenue and earnings per share) to identify companies that are likely to surprise the market with better than expected financial achievement in upcoming quarters. After compiling the digital performance data for any individual company or group of companies into a digital footprint, the algorithms identify companies that are outperforming in their industry and are projected to exceed outside analyst sentiment or expectations. The highest ranked companies in each market capitalization group are then measured for price momentum to identify the highest ranked securities in that group.

To seek to manage risk, the Advisor measures downward momentum to determine when to avoid stocks of certain market capitalizations. The Advisor also evaluates individual stock price momentum to determine when to sell a security and either allocate that capital to cash or cash equivalents or reallocate that capital to another security if macro indicators are still showing positive momentum for that capitalization group.

The Advisor may move the Fund partially or fully to a defensive cash position if all indicators show negative momentum and may keep the Fund in cash or cash equivalents until those market indicators change. The Fund’s strategy may frequently involve buying and selling securities, which may lead to high portfolio turnover. While investing in a particular sector is not a strategy of the Fund, its portfolio may be significantly invested in one or more sectors as a result of the security selection decisions made pursuant to its strategy.

While it is anticipated that the Advisor will purchase and sell securities based on the research of Let Bob’s algorithms, the Advisor has full discretion over investment decisions for the Fund. Therefore, the Advisor has full decision-making power at all times including when it believes that the recommended portfolio does not further the Fund’s investment objective or fails to take into account company events such as corporate actions, mergers and spin-offs.