(ACT) ADVISORSHARES VICE ETF
Diversification stands among the most important attributes of an investment portfolio. While finding true negative or non-correlation among investments remains challenging, building a diversified portfolio during a normal market environment can allow an easier path. Recessions represent a natural and cyclical part of markets. Consumer spending slows significantly during recessionary environments: no new cars, less retail purchases and generally less of everything. However, even in the toughest economic environments, people still historically spend on their leisure, habits and vices. Alcohol and tobacco have been often viewed as potentially recession-resistant areas simply because individuals take pleasure in such related activities during both good times and bad times.
The investment thesis of the AdvisorShares Vice ETF (Ticker: ACT) believes that investing in select alcohol and tobacco companies will provide continued growth and long-term performance across all types of market environments. With evolving societal and regulatory landscapes, the upside potential of cannabis as a new investment avenue has emerged to complement the historically resilient characteristics of alcohol and tobacco. While cannabis represents a new investment frontier, proper caution and due diligence must be exercised surrounding its regulations and risks. ACT only invests in cannabis-related companies conducting federally legal business per the United States government.
|Symbol||Exchange||Inception Date||CUSIP||Indicative Value|
<strong>Why Invest in ACT?</strong>
- Historical Steadiness Complemented by Upside Potential – Alcohol and tobacco possess an established history of delivering attractive returns through multiple market cycles. The emergence of select cannabis-related companies and their growth potential adds a compelling element to an investment theme historically resilient to market drawdowns and recessionary environments.
- Alcohol and Tobacco’s Attractive Profit Margins – Tobacco products still possess among the highest profit margins of consumer products despite less people smoking and heavily restricted advertising. Alcohol-related companies are also known for providing competitive profit margins among consumer products.
- Only ETF with Concentrated Exposure to Emerging Investment Theme – ACT is the only ETF, including passively managed strategies, that provides concentrated exposure to select companies associated with alcohol, cannabis and tobacco. The fully transparent ETF structure delivers this emerging investment theme with intraday liquidity as well as enhanced operational and tax efficiency for its shareholders.
- Experienced Portfolio Management Team -ACT’s portfolio management team carries extensive experience in the capital markets and an established expertise of investing in this area of the equity markets, including as the original portfolio manager of the Vice Fund mutual fund and managing other well-regarded investment strategies.
<strong>Where Does ACT Fit in a Traditional Portfolio?</strong>
ACT can deliver an alpha-seeking complement or satellite equity holding to a broad-based equity allocation. ACT seeks direct exposure to select leaders within the alcohol and tobacco industries complemented by the emerging upside of U.S. federally legal cannabis-related companies.
- Durable Moat Advantage – Select alcohol and tobacco companies may carry a competitive advantage operating within heavily regulated industries, reinforced by an established record of performance across multiple market and economic environments.
- Equity Market’s Top Dividend Payers – The largest alcohol and tobacco companies are among the equity market’s top dividend payers, exhibiting an attractive history of consistent growth and increasing dividends that can enhance the portfolio’s total return.
- Emerging Growth Opportunity -Cannabis-related equities span multiple industries including agriculture, biotechnology, pharmaceutical, real estate, retail, finance and other medical applications. The portfolio manager believes that an evolving landscape of select, U.S. federally legal cannabis-related companies across various formats provides upside potential that may lead to attractive growth opportunities.
- Merger & Acquisition Potential -Due to their emerging growth opportunity, companies involved in cannabis-related business on a U.S. federally legal level may benefit from potential merger and acquisition activity as the market evolves and matures.
<strong>About the Portfolio Manager</strong>
Dan Ahrens is managing director and chief operating officer of AdvisorShares. Dan carries over two decades of experience in the financial services industry serving in a variety of senior-level capacities. He founded Ahrens Advisors, L.P., an SEC-registered investment advisor, where he was portfolio manager of the Ladenburg Thalmann Gaming and Casino Fund. Dan also served as president of the MUTUALS.com Funds, where he launched the Vice Fund (VICEX) and served as its original portfolio manager. He was also the portfolio manager of the Generation Wave Growth Fund (GWGFX). During that time, he was also president and chief compliance officer of Mutuals Advisors, Inc, and acted as president, treasurer and financial & operations officer of an affiliated broker dealer firm. Dan is the author of “Investing in Vice” (St. Martin’s Press, 2004) and has appeared prominently across financial media outlets and major national and trade publications. He earned a Bachelor in Business Administration in Finance from Texas Tech University.
As of 9/25/2020
|4PM Bid/Offer Midpoint||$25.695||Premium Discount||$0.02|
|Assets Under Management||$9,630,376.62|
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.
As of 8/31/2020
|NAV||Market Price Return||S&P 500|
|Since Inception (12/12/2017, Annualized)||3.66||3.60||16.40|
As of 6/30/2020
|NAV||Market Price Return||S&P 500|
|Since Inception (12/12/2017, Annualized)||-1.88||-1.91||9.92|
Performance data quoted represents past performance and is no guarantee of future results. All Fund data and performance data quoted is believed to be accurate, and unless otherwise stated, is sourced from the Fund administrator, the Advisor’s or Sub-Advisor’s proprietary data, and Morningstar. 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.
As of 9/25/2020
|Date||Account Symbol||Stock Ticker||Security Number||Security Description||Shares/Par (Full)||Price (Base)||Traded Market Value (Base)||Portfolio Weight %||Asset Group|
|09/25/2020||ACT||SAM||100557107||BOSTON BEER COMPANY INC-A||1,172.00||875.77||1,026,402.44||10.66%||S|
|TMO||883556102||THERMO FISHER SCIENTIFIC INC||1,839.00||422.29||776,591.31||8.06%||S|
|TPB||90041L105||TURNING POINT BRANDS INC||16,783.00||28.54||478,986.82||4.97%||S|
|LVMUY||502441306||LVMH MOET HENNESSY-UNSP ADR||5,020.00||93.95||471,629.00||4.90%||FS|
|NVS||66987V109||NOVARTIS AG-SPONSORED ADR||5,049.00||87.11||439,818.39||4.57%||FS|
|SMG||810186106||SCOTTS MIRACLE-GRO CO||2,671.00||149.15||398,379.65||4.14%||S|
|BJRI||09180C106||BJ'S RESTAURANTS INC||10,977.00||30.03||329,639.31||3.42%||S|
|BREW||224122101||CRAFT BREW ALLIANCE INC||19,859.00||16.47||327,077.73||3.40%||S|
|DRI||237194105||DARDEN RESTAURANTS INC||3,227.00||97.17||313,567.59||3.26%||S|
|RICK||74934Q108||RCI HOSPITALITY HOLDINGS INC||15,056.00||18.16||273,416.96||2.84%||S|
|BTI||110448107||BRITISH AMERICAN TOB-SP ADR||7,386.00||36.05||266,265.30||2.76%||FS|
|BF/B||115637209||BROWN-FORMAN CORP-CLASS B||3,319.00||74.50||247,265.50||2.57%||S|
|PLAY||238337109||DAVE & BUSTER'S ENTERTAINMEN||15,277.00||16.00||244,355.62||2.54%||S|
|BUD||03524A108||ANHEUSER-BUSCH INBEV-SPN ADR||4,464.00||52.82||235,788.48||2.45%||FS|
|PM||718172109||PHILIP MORRIS INTERNATIONAL||2,693.00||75.40||203,052.20||2.11%||S|
|STZ||21036P108||CONSTELLATION BRANDS INC-A||999.00||181.82||181,638.18||1.89%||S|
|MO||02209S103||ALTRIA GROUP INC||4,477.00||38.27||171,334.79||1.78%||S|
|IMBBY||45262P102||IMPERIAL BRANDS PLC-SPON ADR||8,724.00||17.74||154,763.76||1.61%||FS|
|DEO||25243Q205||DIAGEO PLC-SPONSORED ADR||1,161.00||129.41||150,245.01||1.56%||FS|
|VGR||92240M108||VECTOR GROUP LTD||14,976.00||9.72||145,566.72||1.51%||S|
|MGPI||55303J106||MGP INGREDIENTS INC||2,797.00||37.47||104,803.59||1.09%||S|
|PDRDY||714264207||PERNOD RICARD SA UNSPON ADR||3,127.00||30.97||96,843.19||1.01%||FS|
|TAP||60871R209||MOLSON COORS BEVERAGE CO - B||2,528.00||32.65||82,539.20||0.86%||S|
|X9USDBLYT||BLACKROCK TREASURY TRUST INSTL 62||388,083.72||1.00||388,083.72||4.03%||MM|
Holdings and allocations are subject to risks and to change. A holding identified with an “MM” at the end of its name indicates it is a Money Market fund.
As of 8/31/2020
ACT Sector Allocation
ACT Regional Allocation
Fees & Expenses
|Gross Expenses Ratio||1.43%|
|Fee Waver and/or Expenses Reimbursement||-0.44%|
|Net Expense Ratio||0.99%*|
The Advisor has contractually agreed to reduce its fees and/or reimburse expenses to keep net expenses (excluding amounts payable pursuant to any plan adopted in accordance with Rule 12b-1, interest expense, taxes, brokerage commissions, acquired fund fees and expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles, and extraordinary expenses) from exceeding 0.99% of the Fund’s average daily net assets for at least one year from the date of the Prospectus.
|Ex-Date||Record Date||Pay Date||Cash Div||ST Cap Gain||LT Cap Gain||Return of Capital||Total Distribution (per share)||ACT|