BEDZ: 4th Quarter 2023 Portfolio Review
Performance
BEDZ concluded the fourth quarter of 2023 on a positive note with a 15.81% increase in net asset value (NAV). This outperformed the S&P 500, which recorded a 11.69% gain for the quarter. Looking at the year-to-date performance, BEDZ had a positive return of 23.97% (NAV).
Portfolio
The hotel sector plays a crucial role within the worldwide travel and tourism industry. It comprises a diverse range of lodging options, spanning luxury hotels, resorts, budget-friendly accommodations, boutique hotels, and beyond. This sector’s dynamics are significantly shaped by factors like economic conditions, evolving travel patterns, advancements in technology, and global occurrences. The industry has sustained its expansion, driven by the strong desire to travel in the post-pandemic era and a rise in corporate travel, even in the face of concerns about an economic downturn.
Winners/Losers
The top performers in the portfolio included Bluegreen Vacations Holdings (BVH), which saw a remarkable 101.23% increase for the quarter, Expedia Group Inc. (EXPE) with a solid 48.74% uptick, and Royal Caribbean Cruises LTD (RCL) recording a notable 41.21% gain. On the flip side, the underperformers in the portfolio were Target Hospitality Corp. (TH), experiencing a -38.26% decline for the quarter, Hyatt Hotels Corp. (H) with a -13.99% decrease, and GreenTree Hospitality Group (GHG), with a -13.96% dip for the quarter.
Important Portfolio Trades
Several trades were made throughout the quarter, including the removal of Hilton Grand Vacations Inc. (HGV), Marriott Vacations World (VAC), and Playa Hotels & Resorts (PLYA). Other trades were smaller tactical adjustments to the portfolio.
New Positions
BEDZ initiated new positions in the following stocks: TripAdvisor Inc. (TRIP) with 8,512 shares, H World Group (HTHT) with 5,300 shares, Choice Hotels International Inc. (CHH) with 1,206 shares, and Caesars Entertainment Inc. (CZR) with 3,536 shares.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| IHG | INTERCONTINENTAL HOTELS-ADR | 7.04% |
| RCL | ROYAL CARIBBEAN CRUISES LTD | 5.08% |
| TCOM | TRIP.COM GROUP LTD-ADR | 5.04% |
| BKNG | BOOKING HOLDINGS INC | 5.00% |
| TRIP | TRIPADVISOR INC | 4.69% |
| EXPE | EXPEDIA GROUP INC | 4.65% |
| PK | PARK HOTELS & RESORTS INC | 4.62% |
| MAR | MARRIOTT INTERNATIONAL -CL A | 4.61% |
| BYD | BOYD GAMING CORP | 4.57% |
| VICI | VICI PROPERTIES INC | 4.55% |
As of 12.31.2023. Cash is excluded. Subject to change.
Please see our complete Fund holdings at advisorshares.com/etfs/bedz. The holdings details are updated each market day.
Market Update
The demand in both domestic and international travel remained strong, particularly throughout the holiday season. Indicators like Hotel Occupancy, TSA Checkpoint Data, and Global Commercial Flights consistently exceeded pre-pandemic levels. A notable milestone was reached when over 2.9 million travelers transited through U.S. airports on the Sunday after Thanksgiving, setting a new record for the Transportation Security Administration (TSA). Hotels are proactively adjusting to evolving customer preferences, emphasizing aspects like enhanced hygiene, flexible booking options, and the integration of digital experiences.
Cheers,Past Commentary
Definitions: The S&P 500 Index is a broad-based, unmanaged measurement of changes in stock market conditions based on the average of 500 widely held common stocks. One cannot invest directly in an index.
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting www.advisorshares.com. Please read the prospectus carefully before you invest. Foreside Fund Services, LLC, distributor.
Investing involves risk including possible loss of principal. The hotels, restaurants & leisure industry is highly competitive and relies heavily on consumer spending for success. The prices of securities of companies in the industry may fluctuate widely due to general economic conditions, consumer spending and the availability of disposable income, changing consumer tastes and preferences and consumer demographics, in addition may be affected by the availability and expense of liability insurance. Legislative or regulatory changes and increased government supervision. Companies in the hotels, resorts & cruise lines sub-industry may be affected by unique supply and demand factors that do not apply to other sub-industries. Weak economic conditions in some parts of the world, changes in oil prices and currency values, political instability in some areas, and the uncertainty over how long any of these conditions could continue may have a negative impact on the lodging industry. As a result of such current economic conditions and uncertainty caused by the COVID-19 pandemic, the lodging industry may continue to experience weakened demand for occupancy in some markets.
Shares are bought and sold at market price (closing price) not NAV and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined), and do not represent the return you would receive if you traded at other times.
Holdings and allocations are subject to risks and to change.
The views in this commentary are those of the portfolio manager and may not reflect his views on the date this material is distributed or anytime thereafter. These views are intended to assist shareholders in understanding their investments and do not constitute investment advice.