DWSH: 4th Quarter 2022 Portfolio Review
Strategy
Performance
DWSH had a tough quarter as it lost -10.17% while the S&P 500 gained +7.56%. The additional decline relative to a standard short portfolio mostly had to do with the market bottoming in October. When there’s an abrupt change of leadership, it can cause any momentum strategy to underperform as the portfolio attempts to transition to new leadership. Nevertheless, with the ensuing bear market, DWSH performed well over the year as it gained +17.41% while the S&P 500 lost -18.11%.
Holdings
Currently the portfolio is comprised of 100 companies spread across the major macro sectors. This number will fluctuate over time as positions grow to a larger allocation of the portfolio and as securities are replaced in our sell process. As securities are removed from the portfolio, the new purchases will be allocated at roughly equal weight, depending on the cash level. Over the quarter we saw over 26% of the portfolio turnover as volatility soared in the back half of the quarter, negating trends established in the first half.
Top 10 Holdings
| Ticker | Security Description | Portfolio Weight % |
| EXAS | EXACT SCIENCES CORP | -1.26% |
| UA | UNDER ARMOUR INC-CLASS C | -1.17% |
| NVDA | NVIDIA CORP | -1.15% |
| NKE | NIKE INC -CL B | -1.13% |
| NEM | NEWMONT CORP | -1.12% |
| SIX | SIX FLAGS ENTERTAINMENT CORP | -1.12% |
| EEFT | EURONET WORLDWIDE INC | -1.11% |
| TER | TERADYNE INC | -1.11% |
| NCR | NCR CORPORATION | -1.10% |
| TFX | TELEFLEX INC | -1.10% |
As of 12.31.2022
Portfolio Changes
The portfolio saw relatively fewer allocation changes this quarter vs. Q3 as the current market laggards continued to underperform. The portfolio saw increases in short exposure towards Information Technology and Communication Services while decreasing exposure to Consumer Discretionary and Real Estate.
As of 12.31.2022.
Respectfully,
John G. Lewis
Nasdaq Dorsey Wright
AdvisorShares Dorsey Wright Short ETF (DWSH) Portfolio Manager
Past Manager Commentary
- Alpha: One of the most commonly quoted indicators of investment performance, alpha, is defined as the excess return on an investment relative to the return on a benchmark index.
- Long: Having a “long” position in a security means that you own the security. Investors maintain “long” security positions in the expectation that the stock will rise in value in the future.
- Short: A “short,” or a short position, is created when a trader sells a security first with the intention of repurchasing it or covering it later at a lower price. A trader may decide to short a security when they believe that the price of that security is likely to decrease in the near future.
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.
The Fund is subject to a number of risks that may affect the value of its shares, including the possible loss of principal. Short sales are transactions in which the Fund sells a security it does not own. To complete the transaction, the Fund must borrow the security to make delivery to the buyer. The Fund is then obligated to replace the security borrowed by purchasing the security at the market price at the time of replacement. If the underlying security goes down in price between the time the Fund sells the security and buys it back, the Fund will realize a gain on the transaction. Conversely, if the underlying security goes up in price during the period, the Fund will realize a loss on the transaction. Any such loss is increased by the amount of premium or interest the Fund must pay to the lender of the security. Likewise, any gain will be decreased by the amount of premium or interest the Fund must pay to the lender of the security. Because a short position loses value as the security’s price increases, the loss on a short sale is theoretically unlimited. Short sales involve leverage because the Fund borrows securities and then sells them, effectively leveraging its assets. The use of leverage may magnify gains or losses for the Fund. As with any fund, there is no guarantee that the Fund will achieve its investment objective.
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.
