ACT: May 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 ACT gained 5.90% on its net asset value (NAV) and 5.88% on its market price. The S&P 500 Index returned 4.76%.
As the market continued a nice bounce back from the COVID related March lows, the Fund outperformed again with alcohol stocks, plus cannabis-related healthcare and pharmaceuticals adding the most value. Alcohol-related restaurant and entertainment stocks also continued a strong recovery.
During May, we reduced our larger than normal cash cushion and returned to near fully invested. Remember that as an actively managed fund, we can choose to hold extra cash when market conditions appear lousy and can choose to invest opportunistically in stocks of our choosing. During May, we increased holdings in the restaurant and bar stocks that we hold due to alcohol sales and enjoyed their nice bounce back.
Contributors / Detractors
Top holding Boston Beer (NYSE: SAM) gained 21.05%, after also gaining 26% in April. RCI Hospitality returned 15.64%. Cannabis-related Scotts Miracle Gro (NYSE: SMG) was up 15.44%. Many healthcare-related companies showed strong returns again in May. All top ten holdings: Catalent Inc. (NYSE: CTLT) gained over 12%, PerkinElmer (NYSE: PKI) gained 10%, and Abbvie (NYSE: ABBV) over 12%.
On the negative side, some tobacco companies and “big beer” detracted from performance, but all are relatively small positions in our portfolio. Imperial Brands (OTC: IMBBY) lost more than 12%, Universal Corp (NYSE: UVV) was down over 8%, plus Philip Morris (NYSE: PM) and Altria (NYSE: MO) both showed small losses. Molson Coors (NYSE: TAP) was also down over 7% for the month.
|Ticker||Security Description||Portfolio Weight %|
|SAM||BOSTON BEER COMPANY INC-A||7.67%|
|TMO||THERMO FISHER SCIENTIFIC INC||7.45%|
|NVS||NOVARTIS AG-SPONSORED ADR||5.11%|
|BF/B||BROWN-FORMAN CORP-CLASS B||5.04%|
|LVMUY||LVMH MOET HENNESSY-UNSP ADR||4.90%|
|MGPI||MGP INGREDIENTS INC||4.72%|
As of 05.31.2020. Cash is excluded.
Please see our complete Fund holdings at advisorshares.com/etfs/act. The holdings details are updated each market day.