AdvisorShares is launching the STAR Global Buy-Write ETF (VEGA), which will begin trading on Sept. 18 on the NYSE's Archipelago Exchange.

Partnervest Advisory Services, a Santa Barbara, Calif.-based investment advisor is the sub-advisor on VEGA. Ken Hyman, president and chief executive of Partnervest, and James Herrell, chief investment officer of Partnervest, will serve as the portfolio managers of the fund. The ETF will carry an annual expense ratio of 201 basis points, according to a filing.

The new ETF will use a proprietary strategy, called Volatility Enhanced Global Appreciation (VEGA), to strive for consistent returns in all market cycles, the firm said. Overlaying the ETF's global allocation, Partnervest will utilize a "Buy-Write" or "Covered Call" option approach using other exchange-traded products. The plan simultaneously allows the ETF to write or sell an option against each position in order to wring out additional returns from the portfolio's global exposure.

Using this strategy, VEGA hopes to ensure a consistent income stream from the sale of covered call and/or cash-secured put options and be less dependent on straight returns during market downturns. When volatility is low, the portfolio manager can use put options to manage the downside risk, the firm stated.

Among the risk factors for investors, the filing noted that the strategy of buying and writing put and call options would "entail greater than ordinary investment risks", as would the use of derivatives. The ETF fund "intends to invest in derivatives to a significant extent," the filing said.

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