EATZ: 2nd Quarter 2021 Portfolio Manager 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

The AdvisorShares Restaurant (EATZ) launched April 20, 2021. In the short time since then, the Fund showed just a small loss of -1.01% on both its market price and net asset value (NAV).

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:

In future quarterly updates, I will mention new securities added to the portfolio. While I did add some companies in the short period since the Fund’s initial launch, it’s not worth mentioning since the Fund was only about 40 days old on June 30!

Contributors / Detractors:

In the short period since launch, losers outnumbered winners. COVID is definitely weighing on restaurant stocks. We view it an opportunity for investors as the full COVID recovery should still come in the future.

Pizza stocks have been up! Dominos (NYSE: DPZ) gained over 17% from fund launch 4/20/21 through 6/30/21. Papa Johns (NASDAQ: PZZA) was up more than 11% for the same period. Wingstop (NASDAQ: WING) gained over 14% for the Fund. A couple notable negatives were Chuys Holdings (NASDAQ: CHUY) was down over 15% from fund launch through June 30. Brinker International (NYSE: EAT) was down almost 8%. For this short period of time, there’s clearly a difference between delivered foods and dine-in restaurants.

Top Holdings

Ticker Security Description Portfolio Weight %
CHUY CHUY’S HOLDINGS INC 6.01%
TXRH TEXAS ROADHOUSE INC 5.41%
RUTH RUTH’S HOSPITALITY GROUP INC 5.37%
BLMN BLOOMIN’ BRANDS INC 5.00%
DIN DINE BRANDS GLOBAL INC 4.99%
RICK RCI HOSPITALITY HOLDINGS INC 4.92%
FRGI FIESTA RESTAURANT GROUP 4.86%
JACK JACK IN THE BOX INC 4.58%
DPZ DOMINO’S PIZZA INC 4.54%
PZZA PAPA JOHN’S INTL INC 4.35%

As of 6.30.2021. Cash is not included.

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

 

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