EATZ: 4th Quarter 2021 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/eatz.

Commentary

For the final quarter of 2021, October 1 through December 31, 2021, the AdvisorShares Restaurant ETF (EATZ) gained 1.85% on its net asset value (NAV) and 1.76% on its market price. The Fund just launched with an inception date of April 20, 2021, and since that time the Fund has had a small loss of -4.61% on its net asset value (NAV) and -4.59% on its market price. COVID has lingered on and employment concerns have weighed on the restaurant industry. Considering these negatives hurting the restaurant business worldwide, I personally feel that things should improve and these stocks could be excellent buys at current levels.

While the Fund’s overall performance is largely tied to the success of the restaurant industry, we aim for relative outperformance through good individual security selection and successful trading.

New Positions:

Only one new addition to the portfolio during the quarter: Sweetgreen, Inc. (NYSE: SG). Of course, over the three-month period, we did add on to multiple positions while trimming others that were less attractive.

Contributors / Detractors:

During this continued difficult time for the industry, the losers continued to outnumber winners. However, some of our largest holdings were among the best contributors. Del Taco (NASDAQ: TACO) gained over 43% on buyout news. Large holding RCI Hospitality (NNASDAQ: RICK was up 13.75%. Domino’s Pizza (NYSE: DPZ) gained over 18%, while Papa Johns was also a gainer. We just added One Group Hospitality (NASDAQ: STKS) at the end of September and it gained 17.96% for the quarter.

Losers were mostly from big chains or technology-based. Most were not large holdings. DoorDash and Just Eat Takeaway were down; and Bloomin Brands, Brinker, and Cheesecake Factory were among the most significant negatives.

Top Holdings

Ticker Security Description Portfolio Weight %
RICK RCI HOSPITALITY HOLDINGS INC 7.15%
PZZA PAPA JOHN’S INTL INC 5.77%
DPZ DOMINO’S PIZZA INC 5.69%
TACO DEL TACO RESTAURANTS INC 5.42%
PLAY DAVE & BUSTER’S ENTERTAINMEN 4.99%
WING WINGSTOP INC 4.86%
STKS ONE GROUP HOSPITALITY INC/TH 4.71%
FRGI FIESTA RESTAURANT GROUP 4.14%
DRI DARDEN RESTAURANTS INC 4.10%
BLMN BLOOMIN’ BRANDS INC 4.01%

As of 12.31.2021. Cash is not included. Subject to change.

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

 

Cheers,

Dan Ahrens
AdvisorShares
AdvisorShares Restaurant ETF (EATZ) 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.

The success of companies owning and operating restaurants depends heavily on disposable household income and consumer spending, and changes in demographics and consumer preferences can affect the success of such companies. These companies may be subject to severe competition, which may have an adverse impact on their profitability. In addition, restaurants may be affected by nutritional and health concerns, and federal, state and local food inspection and processing controls. Changes in labor laws and other labor issues, such as increased labor costs, could adversely affect the financial performance of such companies