BEDZ: 3rd Quarter 2024 Portfolio Review
Portfolio
In Q3 of 2024, BEDZ delivered positive results with its net asset value (NAV) increasing by 5.72%. As of September 30, 2024, the fund earned a Four-Star Overall Morningstar Rating in the Consumer Cyclical category, ranking it among the top performers based on risk-adjusted returns out of 49 funds in the category.
Portfolio
The hotel industry is a key component of the global travel and tourism market, offering a wide variety of lodging options from luxury hotels and resorts to budget-friendly accommodations and boutique properties. The sector is influenced by a range of factors, including economic conditions, evolving travel preferences, technological innovations, and major global events. While the industry can be volatile, it presents compelling investment opportunities particularly during times of economic expansion and rising travel demand.
Winners/Losers
The top performers in the portfolio this quarter included Trip.com Group Ltd ADR (TCOM) posting a 26.45% gain, Summit Hotel Properties Inc. (INN) with a 19.11% increase, and Expedia Group Inc. (EXPE) which rose by 17.49%. On the other hand, underperformers were MGM Resorts International (MGM) with a decline of 12.04%, Target Hospitality (TH) down 10.68%, and Park Hotels & Resorts Inc. (PK) which fell by 4.21%.
Important Portfolio Trades
Throughout the quarter, the portfolio underwent various trades, including the removal of Airbnb Inc. (ABNB), Greentree Hospitality (GHG), TripAdvisor Inc. (TRIP), and Playa Hotels & Resorts (PLYA). Additionally, there were several smaller tactical adjustments made to the portfolio.
New Positions
BEDZ initiated new positions in the following stocks: Carnival Corp. (CCL) with 7,000 shares, and reentered positions in Monarch Casino & Resorts Inc. (MCRI) with 2,100 shares and Summit Hotel Properties Inc. (INN) with 23,900 shares.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| TCOM | TRIP.COM GROUP LTD-ADR | 6.50% |
| NCLH | NORWEGIAN CRUISE LINE HOLDIN | 5.75% |
| RCL | ROYAL CARIBBEAN CRUISES LTD | 5.47% |
| BKNG | BOOKING HOLDINGS INC | 4.96% |
| TH | TARGET HOSPITALITY CORP | 4.78% |
| WH | WYNDHAM HOTELS & RESORTS INC | 4.73% |
| MCRI | MONARCH CASINO & RESORT INC | 4.67% |
| EXPE | EXPEDIA GROUP INC | 4.64% |
| BYD | BOYD GAMING CORP | 4.63% |
| INN | SUMMIT HOTEL PROPERTIES INC | 4.60% |
As of 9.30.2024. 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.
Market Update
Cheers,
Dan Ahrens
AdvisorShares AdvisorShares Hotel ETF (BEDZ) Portfolio Manager
Past Commentary
The Morningstar Rating™ for funds, or “star rating,” is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Past performance is no guarantee of future results.
©2024 Morningstar, Inc. All Rights Reserved. Morningstar and/or its content providers are the proprietors of this information; do not permit its unauthorized copying or distribution; do not warrant it to be accurate, complete or timely; and are not responsible for damages or losses arising from its use. Past performance is no guarantee of future results.
BEDZ received four stars for the overall rating among 49 funds, four stars for the 3-year rating among 49 funds in Morningstar’s Consumer Cyclical category as of September 30th, 2024.
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 or summary 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.