CWS: 2nd Quarter 2026 Portfolio Review

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I’m pleased to say that the AdvisorShares Focused Equity ETF (CWS) had another good quarter for the second quarter of 2026. During these three months, the fund’s traded shares gained 5.39% (market), while the fund’s net asset value increased by 5.20%.

Here’s how CWS performed during Q2:

Source: StockCharts.com; from 04.01.2026 to 06.30.2026. Past performance is no guarantee of future returns.

The Broader Market Environment

It wasn’t an easy time to be an investor. The stock market had to deal with several unexpected crises during the second quarter of 2026. The war between Russia and Ukraine continued to be a major sore spot for world trade.

There was also Operation Epic Fury, the American military attack on Iran. This attack was followed by many promises that a resolution was at hand. Sadly, no concrete plans have emerged so far.

The war has impacted the economy. When it started, oil prices surged. At one point, oil got close to $120 per barrel. That soon changed as prices started to fall. By the end of the second quarter, oil was close to $70 per barrel.

Growth stocks led the charge during the early part of Q2, but that gradually changed as value stocks started to shine. We also saw some weakness in the famous Mag 7. The mega-cap tech stocks had led the market for so long that it was surprising to see the former all-stars lose ground.

Investors were also delighted by the IPO of Space Exploration Technologies (SPCX), better known as SpaceX. After an initial liftoff, SpaceX soon came back to earth.

Let’s run through some of the key earnings reports we got during Q1. On April 16, Abbott Labs (ABT) reported Q1 earnings of $1.15 per share. That was one penny better than expectations, and the details were pretty good. Q1 sales were up 7.8% on a reported basis and 3.7% on a comparable basis. That was a tiny bit better than expected.

During the quarter, Abbott completed its acquisition of Exact Sciences. CEO Robert Ford said, “The acquisition of Exact Sciences adds another high-growth business to the Abbott portfolio, further strengthening our confidence in delivering accelerating growth as we move through the year.”

The weak spot was nutrition sales, but medical devices, diagnostics and pharmaceuticals did well. Glucose monitors did especially well. Abbott still faces many lawsuits related to Similac, its cow’s milk-based formula. Abbott was recently ordered to pay $70 million in damages to four families.

For 2026, Abbott sees comparable-sales growth of 6.5% to 7.5%, and earnings between $5.38 and $5.58 per share. That includes dilution of 20 cents due to the Exact deal. Abbott sees Q2 earnings coming in between $1.25 and $1.31 per share. I’m an optimist on Abbott.

Mueller Industries (MLI) also reported very good earnings for its Q1. Net sales rose 19% to $1.18 billion. Earnings rose 55% to $2.16 per share. Since Mueller is followed by so few analysts, I don’t track Wall Street’s consensus, but going by the stock’s reaction, I think we can safely say that Mueller beat the Street.

During the quarter, copper averaged $5.80 per pound, up 26.8% over last year. During the quarter, Mueller generated net cash of $79.7 million, which nearly matched the $75 million it spent on share buybacks. During Q1, Mueller bought back 650,000 shares of MLI. The company has no debt and $1.38 billion in cash.

Best of all, Mueller raised its quarterly dividend by 40% to 35 cents per share. This is the sixth year in a row that Mueller has increased its dividend by double digits. The stock rallied 11.4% on the day after the earnings report.

Moody’s (MCO) was another one of our stocks that reported very good results for its Q1. Earnings rose 13% to $4.33 per share, which topped estimates by 11 cents per share. Moody’s revenues rose 8% to $2.1 billion, which means the firm also beat on revenue.

I was very impressed to see MCO’s operating margin widen by 150 basis points to 53.2%. Moody’s has been shifting its focus to high-margin recurring revenue. The company is also expanding its partnerships to help its analytics services.

For Q1, MCO’s operating-cash flow was up 24%, and its free-cash flow was up 26%. Moody’s said it expects revenue growth this year to be in the high single digits. The company also stood by its forecast for full-year earnings between $16.40 and $17.00 per share.

During Q1, Moody’s returned $1.7 billion to shareholders, including $1.5 billion in share repurchases and $185 million in dividends.

After the closing bell on April 23, Comfort Systems USA (FIX) released an outstanding earnings report. For the three months ending in March, FIX made $10.51 per share. That blew past expectations of $6.81 per share. Earnings more than doubled last year’s Q1 earnings of $4.75 per share.

If you’re not familiar with Comfort Systems USA, the company is a leading provider of commercial, industrial and institutional HVAC and electrical-contracting services.

Quarterly revenues increased from $1.83 billion to $2.87 billion. FIX’s operating-cash inflow rose from $88 million last year to $388.8 million for Q1. Backlog stood at $12.45 billion. The company also raised its dividend by 10 cents to 80 cents per share.

FICO (FICO) had an outstanding fiscal Q2 (ending March 31). Net income jumped 60% to $12.50 per share. Free-cash flow was $214.3 million, compared with $65.5 million last year. Quarterly revenue rose 30% to $691.7 million.

FICO is also raising its guidance. Before, FICO was expecting full-year revenues of $2.35 billion. Now it expects revenues of $2.45 billion. FICO is raising its full-year earnings guidance from $38.17 to $40.45 per share.

This should calm some of FICO’s critics, who have expected the company to be punished by unfriendly regulations in Washington.

Amphenol (APH) had another very strong quarter. For its Q1, APH’s earnings rose 68% to $1.06 per share. That beat the Street by 11 cents per share. Sales were up 68%, “driven by strong organic growth in most of [its] end markets, including exceptional organic growth in the IT datacom market, as well as contributions from the company’s acquisition program.”

Amphenol had operating-cash flow of $1.1 billion and free-cash flow of $831 million.

For Q2, Amphenol expects sales to between $8.1 and $8.2 billion. That’s growth of 43% to 45%. Earnings are expected to be between $1.14 and $1.16 per share. That’s growth of 41% to 43%.

Sprouts Farmers Market (SFM) may have been our biggest winner during earnings season. Sprouts said it made $1.71 per share for its fiscal Q1. That’s for the 13-week period ending on March 29.

The stock jumped 15% on Thursday’s trading. The CEO said the quarter “played out largely as we expected.”

SFM’s Q1 sales were up 4% over last year. The key figure is that same-store sales were down 1.7%. That’s not good, but there’s some cause for optimism. During the quarter, the company owned six new stores, which brings the total to 483 stores.

For Q2, Sprouts sees earnings between $1.32 and $1.36 per share and same-store sales growth between -2% and flat.

For all of 2026, SFM sees same-stores sales growth between -1% and +1% and earnings between $5.32 and $5.48 per share. The stock is going for less than 15 times the upper end of SFM’s guidance.

Ticker	Security Description	Portfolio Weight %
FIX	COMFORT SYSTEMS USA INC	8.57%
IESC	IES HOLDINGS INC	7.48%
CASY	CASEY’S GENERAL STORES INC	5.74%
APH	AMPHENOL CORP-CL A	5.25%
ALSN	ALLISON TRANSMISSION HOLDING	4.58%
HSIC	HENRY SCHEIN INC	4.44%
SAIC	SCIENCE APPLICATIONS INTE	4.38%
HEI	HEICO CORP	4.37%
SFM	SPROUTS FARMERS MARKET INC	4.32%
MLI	MUELLER INDUSTRIES INC	4.24%

As of 06.30.2026. Holdings subject to change.

The good news for investors is that the price of oil has dropped significantly. That hasn’t shown up yet in prices at the pump, but it soon will. High gasoline prices act like a tax on consumer spending. Every dollar that goes to the pump is one that won’t be spent at the mall.

The Federal Reserve will probably raise interest rates sometime later this year. I doubt the Fed will be overly aggressive with rates. We’ll probably see or two hikes before the end of this year.

The economy and stock market are generally in good health. Inflation is improving. Jobs growth is essentially flat, and the unemployment rate is low. Kevin Warch, the new head of the Federal Reserve, has made it clear that he wants to see inflation return to below the Fed’s target rate of 2%.

Overall, I’m very optimistic for the stocks in the AdvisorShares Focused Equity ETF. Our stocks are from high-quality companies that can prosper in any environment. Our stocks tend to have stronger balance sheets and consistent operating histories.

Nervousness on Wall Street is inevitable, but I expect our stocks to perform much better than the overall market.

In a first for the ETF industry, the portfolio strategist of CWS has “skin in the game.” The strategist’s compensation is directly tied to portfolio’s performance. Using the trailing 12-month returns of CWS vs. its S&P 500 Index benchmark, stronger outperformance is rewarded with a larger management fee while weaker underperformance is penalized with a smaller management fee.

After the Fund’s March performance, the CWS fulcrum fee will be 0.65% in July 2026.