EATZ: 1st Quarter 2022 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.

Performance

For the first quarter of 2022, January 1 through March 31, 2021, the AdvisorShares Restaurant ETF (EATZ) returned -7.06% on its net asset value (NAV) and -7.27% on its market price – slightly more than the S&P 500 Index. The Fund just launched with an inception date of April 20, 2021. As COVID problems seem to be lifting, the restaurant industry has been hampered by lingering supply chain and employment constraints and now – inflation.

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. We sidestepped recent losses by Wingstop (NASDAQ: WING) by removing it from the portfolio earlier in the year.

Portfolio

New Positions

Three new positions were added to the Fund during the quarter, and all were moved into top 5 positions in the portfolio.  We added Arcos Dorados Holdings (NYSE: ARCO), BBQ Holdings (NASDAQ: BBQ), and Dutch Bros Inc (NYSE: BROS). As always over the course of the quarter we added to some other positions while multiple others less attractive.

Contributors / Detractors

Some of our largest holdings were among the best contributors and include the new positions just added ARCO and BROS.  ARCO gained over 40%. Top holding Dave and Buster’s (NASDAQ: PLAY) was also up more than 27%.  The Fund did hold more losers than gainers during the quarter. Big contributors in previous periods were a drag this quarter. RCI Hospitality (NASDAQ: RICK) was down more than  21%, and Domino’s Pizza (NYSE: DPZ) lost over 27% while pizza competitor Papa John’s (NASDAQ: PZZA) lost over 20%.

Top Holdings

Ticker Security Description Portfolio Weight %
PLAY DAVE & BUSTER’S ENTERTAINMEN 9.82%
ARCO ARCOS DORADOS HOLDINGS INC-A 9.79%
RICK RCI HOSPITALITY HOLDINGS INC 8.81%
BBQ BBQ HOLDINGS INC 7.93%
BROS DUTCH BROS INC-CLASS A 6.95%
STKS ONE GROUP HOSPITALITY INC/TH 5.60%
PZZA PAPA JOHN’S INTL INC 4.91%
CHUY CHUY’S HOLDINGS INC 4.80%
DPZ DOMINO’S PIZZA INC 4.42%
DRI DARDEN RESTAURANTS INC 3.89%

As of 03.31.2022. 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.

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.