BEDZ: 4th Quarter 2022 Portfolio Review
Performance
BEDZ demonstrated positive performance in the 4th quarter of 2022. Based on net asset value (NAV), BEDZ’s was up 12.95%, beating the S&P 500 which was up 7.56% for the quarter.
Portfolio
The hotel industry witnessed stronger performance in Q4 primarily driven by increased corporate travel, weddings, and winter vacations. Hotel demand across leisure and business destinations continued to grow but has still not reached pre-pandemic levels.
Winners / Losers
The portfolio’s laggard was Airbnb Inc. (ABNB), down 18.57% for the quarter. Positive contributors to performance were Bluegreen Vacations Holding (BVH) up 45.21% and Monarch Casino & Resort Inc. up 32.96% for the quarter.
Important Portfolio Trades
Several trades were made throughout the quarter, most notable were the removal of Golden Entertainment Inc. (GDEN), MGM Resorts International (MGM), and Penn Entertainment Inc. (PENN) from the portfolio.
New Positions
BEDZ added new positions in Apple Hospitality REIT Inc. (APLE), Chatham Lodging Trust (CLDT), and Host Hotels & Resorts Inc. (HST). Other trades made in the portfolio were smaller tactical adjustments.
Market Update
One of the biggest issues facing hotels right now is labor shortages. The industry is responding by raising pay to attract talent, adjusting amenities, and outsourcing to create more efficiencies. The Fed’s monetary policy has continued to affect lodging demand, as well with slowing construction for new hotels. In 2023, we expect growth in business travel and for the hotel industry to surpass pre-pandemic levels of demand.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| TH | TARGET HOSPITALITY CORP | 15.05% |
| CLDT | CHATHAM LODGING TRUST | 5.00% |
| WH | WYNDHAM HOTELS & RESORTS INC | 4.85% |
| MAR | MARRIOTT INTERNATIONAL -CL A | 4.66% |
| GLPI | GAMING AND LEISURE PROPERTIE | 4.66% |
| APLE | APPLE HOSPITALITY REIT INC | 4.64% |
| HGV | HILTON GRAND VACATIONS INC | 4.62% |
| MCRI | MONARCH CASINO & RESORT INC | 4.58% |
| H | HYATT HOTELS CORP – CL A | 4.54% |
| VICI | VICI PROPERTIES INC | 4.33% |
As of 12.31.2022. 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.
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.