BEDZ: 2nd Quarter 2021 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/bedz.

Commentary

The AdvisorShares Hotel (BEDZ) launched April 20, 2021. Through June 30, it has less than 3 months of performance with a  gain of 0.99% on market price and 0.81% on its net assets value (NAV).    

While the Fund’s overall performance is largely tied to the success of the hotel industry, we plan for relative outperformance through good trading techniques and successful individual security selection among hotels and related areas.

New Positions:

In future quarterly updates, I will discuss the new positions added to the BEDZ portfolio. While we did a couple new stocks to the Fund since its launch, there aren’t worth mentioning when the Fund is only about 40 days old as of June 30th. All the positions are new!

Contributors / Detractors:

While the Fund has only been launched a short time, a few positions stood out. Target Hospitality Corp. (NASDAQ: TH) gained over 47% in the 2ns quarter. Red Rock Resorts, Inc (NASDAQ: RRR) gained over 30%. Full House Resorts (NASDAQ: FLL) was up more than 16%, while VICI Properties (NYSE: VICI), the REIT that owns Caesars Palace gained 11%. I’ve stated publicly that for now, the Fund is weighted more towards leisure travel than business. That’s the beauty of active management as to compared to an index is an area lie this.

The detractors were only small holdings in the Fund. TripAdvisor (NASDAQ: TRIP) was down over 25%. Chinese tour operator Tuniu Corp (NASDAQ: TOUR) lost over 31% in the quarter, and has since been removed from the Fund. Airbnb Inc. (NASDAQ: ABNB) lost over 18% in the 2nd quarter.

Investors in a focused, industry related Fund should have a very long-term focus. We remain bullish about future hotel and travel growth as the world continues to slowly recover from COVID-19 and its new variants.  

Top Holdings

Ticker Security Description Portfolio Weight %
RRR RED ROCK RESORTS INC-CLASS A 5.75%
BYD BOYD GAMING CORP 5.62%
VICI VICI PROPERTIES INC 5.11%
CNTY CENTURY CASINOS INC 5.06%
FLL FULL HOUSE RESORTS INC 5.02%
WH WYNDHAM HOTELS & RESORTS INC 4.76%
HGV HILTON GRAND VACATIONS INC 4.70%
GLPI GAMING AND LEISURE PROPERTIE 4.63%
HLT HILTON WORLDWIDE HOLDINGS IN 4.58%
MAR MARRIOTT INTERNATIONAL -CL A 4.02%

As of 6.30.2021. Cash is not included.

Please see our complete Fund holdings at advisorshares.com/etfs/bedz. The holdings details are updated each market day.

Cheers,

Dan Ahrens
AdvisorShares
AdvisorShares Hotet ETF (BEDZ) Portfolio Manager

 

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.