BEDZ: 2nd Quarter 2022 Portfolio 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.

Performance

​After having a strong 1st quarter in 2022 and beating the S&P 500 by over 5%, BEDZ gave those gains back in the 2nd quarter of 2022. It was a very difficult quarter for the hotel and cruise industry and BEDZ returned -25.70% for Q2 2022 with most of the negative performance occurring in June.

Portfolio

The hotel industry is beginning to feel the impact of the Federal Reserve’s aggressive approach to curbing inflation. We are finding ourselves in a fine balance between capturing the pent-up demand from delayed weddings and events with increased labor costs, a tight labor market, and a delayed rebound to pre-pandemic levels in business travel and business events. So, in an industry that still needs to invest in new properties, technologies and services, the cost of the capital required is steadily increasing.

Contributors / Detractors

For the quarter, basically all the positions were down, led by Airbnb, Expedia and Golden Entertainment.

Important Portfolio Trades

Several trades were made throughout the quarter, most notable was the increase of over 17,000 shares of Playa Hotels & Resorts. The rest of the trades were smaller tactical adjustments to the portfolio, mostly around the casino hotel industry.

New Positions

No new positions were added during the quarter.

General Update 

The markets are clearly volatile this year. We have what some would call an overheated economy driven by the unprecedented action of both the Fed during the pandemic and by Federal legislators who were aggressively driving capital into citizen’s bank accounts in an attempt to offset business losses during the lockdown. Now with the Fed trying to tame inflation, there is a bill to be paid for all the financial stimulus. Additionally, there is war in Ukraine, and China is still struggling to contain their COVID related issues.

Top Holdings

Ticker Security Description Portfolio Weight %
BVH BLUEGREEN VACATIONS HOLDING 8.09%
RRR RED ROCK RESORTS INC-CLASS A 6.64%
TH TARGET HOSPITALITY CORP 6.29%
PLYA PLAYA HOTELS & RESORTS NV 4.81%
MCRI MONARCH CASINO & RESORT INC 4.71%
GDEN GOLDEN ENTERTAINMENT INC 4.66%
MAR MARRIOTT INTERNATIONAL -CL A 4.62%
BYD BOYD GAMING CORP 4.52%
WH WYNDHAM HOTELS & RESORTS INC 4.50%
CHH CHOICE HOTELS INTL INC 4.40%

As of 06.30.2022. 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.

 

Cheers,

Dan Ahrens
AdvisorShares
AdvisorShares Hotel ETF (BEDZ) Portfolio Manager

 

Past Manager Commentary

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.