ACT: April 2020 Portfolio Manager Review
Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. Returns less than one year are not annualized. For the fund’s most recent standardized and month-end performance, please click www.advisorshares.com/etfs/act.
For the month, the AdvisorShares Vice ETF (ACT) gained 13.52% % on its net asset value (NAV) and 14.33% on its market price. The S&P 500 Index returned 12.82%.
As the market performed a nice bounce back from the COVID related lows, ACT outperformed with healthcare and pharmaceuticals leading the way. Alcohol stocks and alcohol-related restaurant stocks also had a very nice bounce for the month. The Fund actually performed much like we’d expect it to. Alcohol and tobacco stocks have historically been considered recession-resistant stocks that perform regardless of movements in the overall market. With the COVID-19 pandemic, its been well documented that alcohol sales are spiking. People are simply drinking at home and getting alcohol through increased home delivery and curbside pickup. Additionally, multiple alcohol distilleries have gotten involved in alcohol production for hand sanitizers.
Like we’ve seen with alcohol sales, cannabis-related sales have performed similarly. Sales are spiking along with the pandemic’s stay at home orders. Dispensaries have been deemed essential business. Much of our cannabis-related holdings in ACT’s portfolio are actually pharmaceutical and healthcare companies with DEA licenses for cannabis, but where their primarily business focus is elsewhere. A number of our top holdings are directly involved with coronavirus – whether it be face mask production or work on the development of treatments or immunizations.
At the end of April, ACT is still holding a larger than normal cash position. Under normal circumstances, ACT stays near fully invested. At the end of April, we’re holding just over 5% in cash. In early May, I’ve already opportunistically invested some of that cash.
Contributors / Detractors
Many healthcare-related companies showed healthy returns in April, including some top ten holdings: Catalent Inc. (NYSE: CTLT) gained over 33%, Abbott Labs (NYSE: ABT) was up 17%. Thermo-Fisher Scientific (NYSE: TMO) gained 18%, PerkinElmer (NYSE: PKI) gained 20%, and Abbvie (NYSE: ABBV) over 9%. On the alcohol-related side, always one of our largest holdings, Boston Beer (NYSE: SAM) was up 26%, while Jack Daniels maker Brown-Forman (NYSE: BF.b) was up 12%.
Only one security in the portfolio was negative in April – a small position in foreign alcohol company AmBev (NYSE: ABEV).
|Ticker||Security Description||Portfolio Weight %|
|TMO||THERMO FISHER SCIENTIFIC INC||7.56%|
|SAM||BOSTON BEER COMPANY INC-A||6.71%|
|NVS||NOVARTIS AG-SPONSORED ADR||5.25%|
|BF/B||BROWN-FORMAN CORP-CLASS B||5.04%|
|LVMUY||LVMH MOET HENNESSY-UNSP ADR||4.74%|
|BREW||CRAFT BREW ALLIANCE INC||3.68%|
Please see our complete Fund holdings at advisorshares.com/etfs/act. The holdings details are updated each market day.
As of 04.30.2020. Cash is excluded.
Past Manager Commentary