HDGE: 2nd Quarter 2025 Portfolio Review
Performance
For the second quarter of 2025, the AdvisorShares Ranger Equity Bear ETF (HDGE) returned -5.07% (NAV) | -4.62% (market) while the S&P 500 Index returned 10.94%.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| AAPL | APPLE INC | -4.05% |
| KMX | CARMAX INC | -2.95% |
| OMC | OMNICOM GROUP | -2.37% |
| SNV | SYNOVUS FINANCIAL CORP | -2.27% |
| PAG | PENSKE AUTOMOTIVE GROUP INC | -2.26% |
| APTV | APTIV PLC | -2.24% |
| LAD | LITHIA MOTORS INC | -2.22% |
| EXPE | EXPEDIA GROUP INC | -2.22% |
| XHB | SPDR S&P HOMEBUILDERS ETF | -2.16% |
| LRCX | LAM RESEARCH CORP | -2.14% |
As of 06.30.2025. Cash not included. Holdings subject to change.
Markets Review
Early in the quarter, the market became deeply oversold, and investor sentiment became decidedly bearish. As a result, we cut HDGE’s exposure to short positions to well below average.
Subsequently, the market has rallied to new highs and exposure is both at the top end of the range and in more aggressive positions for the following reasons:
According to The Daily Shot, the S&P 500 Index Risk Premium compared with the 10-Year Treasury Yield is flat. As a result, stocks provide little value relative to government securities.
As of 06.30.2025. Source: The Daily Shot. The S&P 500 risk premium is the S&P 500 Index forward earnings yield less 10 year Treasury yield.
Second, the CNN Fear & Greed Index is now in the “extreme greed” zone.
As of 07.07.2025. Source: CNN.com. The CNN Fear and Greed Index is a composite index of sentiment-related variables for the US stock market. These variables include: market momentum, stock price strength, stock price breadth, put and call options, market volatility, safe haven demand, and junk bond demand.
Third, the National Association of Active Investment Managers (NAAIM) Exposure Index shows that professional investors are fully loaded into stocks at 99.30% and well above the 8 week simplified moving average (SMA) of 84.87%.
As of 07.02.2025. Source: Koyfin. SPX is the S&P 500 Index. The NAAIM Exposure Index represents the average exposure to US Equity markets reported by NAAIM members.
We consider levels of extreme greed in the CNN Fear & Greed Index and full allocation in the NAAIM Exposure Index to be contrary indicators.
As a result, we have increased our short positions and beta in the portfolio.
Lastly, the Short-Term Composite from Investors Intelligence, which measures dozens of technical indicators, is very overbought at a level of 87.90.
As of 07.03.2025. Source: InvestorsIntelligence.com. The Short Term Composite Indicator is a proprietary indicator generated from scores awarded to 29 market indicators (unweighted) and is only concerned with the most recent action. The Indicator oscillates between values of 0 and 100 and provides the first indication of short term moves. Typically, it detects potential up moves from oversold readings and down moves from overbought readings.
Respectfully,
Brad Lamensdorf Jon DelVecchio
Ranger Alternative Management
AdvisorShares Ranger Equity Bear ETF (HDGE) Co-Portfolio Managers
Past Commentary
Definitions:
The S&P 500 Index is a free-float capitalization-weighted index based on the common stock prices of 500 American companies. It is one of the most commonly followed equity indices and many consider it the best representation of the market and a bellwether for the U.S. economy.
A Bear Market (Bearish) is a market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. As investors anticipate losses in a bear market and selling continues, pessimism only grows. Although figures can vary, for many, a downturn of 20% or more in multiple broad market indexes, such as the Dow Jones Industrial Average (DJIA) or Standard & Poor’s 500 Index (S&P 500), over at least a two-month period, is considered an entry into a bear market.
A Bull Market (Bullish) is a financial market of a group of securities in which prices are rising or are expected to rise. The term “bull market” is most often used to refer to the stock market, but can be applied to anything that is traded, such as bonds, currencies and commodities.
The Dow Jones Industrial Average (DJIA) is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes.
The Nasdaq 100 Index is a stock index of the 100 largest companies by modified market capitalization trading on Nasdaq exchanges, excluding companies in the financial sector.
A short position is the sale of a borrowed investment with the expectation that it will decline in value.
Volatility is a statistical measure of the dispersion of returns for a given security or market index. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. Commonly, the higher the volatility, the riskier the security.
Implied Volatility is the estimated volatility of a security’s price. In general, implied volatility increases when the market is bearish and decreases when the market is bullish. This is due to the common belief that bearish markets are more risky than bullish markets.
The Volatility Index (VIX) is the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts. The VIX is a widely used measure of market risk and is often referred to as the “investor fear gauge”. The VIX is a contrarian sentiment indicator that helps to determine when there is too much optimism or fear in the market.
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There is no guarantee that the Fund will achieve its investment objective. An investment in the Fund is subject to risk, including the possible loss of principal amount invested. The Fund may invest in (or short) ETFs, ETNs and ETPs. In addition to the risks associated with such vehicles, investments, or reference assets in the case of ETNs, lack of liquidity can result in its value being more volatile than the underlying portfolio investment. Other Fund risks include market risk, equity risk, short sales and leverage risk, large cap risk, early closing risk, liquidity risk and trading risk. Short sales involve leverage because the Fund borrows securities and then sells them, effectively leveraging its assets. The use of leverage may magnify gains or losses for the Fund. See prospectus for specific risks and details.
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Holdings and allocations are subject to risks and change.
The views in this commentary are those of the portfolio manager and many not reflect his views on the date this material is distributed or any time thereafter. These views are intended to assist shareholders in understanding their investments and do not constitute investment advice.