GK: 4th Quarter 2024 Portfolio Review
Commentary
PERFORMANCE
The AdvisorShares Gerber Kawasaki ETF (GK) ended 2024 with a 20.22% (NAV) and 20.39% (market) gains, marking our second consecutive year of over 20% returns. We are proud of this achievement, especially given the challenges of navigating volatile markets. During the fourth quarter, the fund delivered a 1.45% (NAV) and 1.49% (market) return, despite being down two out of three months. A strong November helped offset losses in October and December. Overall, 2024 was a highly successful year, driven in large part by the continued rise of AI, a theme central to our investment strategy.
PORTFOLIO ADJUSTMENTS IN Q4
As active managers, we made several strategic adjustments to our portfolio in Q4:
- Exited positions in Zoetis & Regeneron (Healthcare) → Added Eli Lilly after a decline in its stock created a buying opportunity.
- Sold General Dynamics → Added Kratos Defense, a drone and AI-focused military tech company, which aligns better with our long-term thesis.
- Exited cannabis sector → Due to Biden’s failure to enact meaningful reforms and low confidence in the Trump administration’s stance on cannabis policy.
- Reduced MGM Resorts position → Added Flutter Entertainment (FanDuel) & Genius Sports, both benefiting from the booming U.S. online gambling market.
We believe these changes will add value over time and position the fund well for continued strong performance.
OUTLOOK FOR 2025
Looking ahead to 2025, we see exciting opportunities in the technology, consumer, and communication services sectors, where we remain overweight. With the Trump administration returning to the White House, the economic environment is expected to shift toward a more pro-business stance. Additionally, the Federal Reserve’s potential rate cuts and a resilient economy set the stage for what could be another strong year for markets.
However, market risks remain, particularly in valuations. While S&P 500 earnings are rising, valuations are currently above historical norms. If corporate earnings fail to meet expectations, we could see sharp declines in individual stocks. This reinforces the importance of active stock selection over passive indexing.
Bitcoin & AI: Key Investment Theme — Our fund continues to differentiate itself with Bitcoin exposure, currently around 4% of net assets, making it one of our top holdings. We remain bullish on digital assets, as well as AI, which we believe is one of the most transformative investment opportunities since the early days of the internet. Our portfolio is heavily positioned in technology companies poised to capitalize on AI advancements. While the AI narrative is strong, it is essential to remain grounded. AI’s real value lies in enhancing productivity across industries, and we believe companies that effectively adopt AI will see significant profit growth over time.
Consumer Strength & Economic Risks — A pro-business environment typically encourages higher consumer spending and greater corporate investment, creating a positive feedback loop for markets. However, one area of concern is the potential shift in economic policies related to tariffs. The Trump administration has historically favored tariffs, which function as a consumer tax, shifting financial burdens from the wealthy to the broader population. Tariffs can slow economic growth and global trade, introduce market uncertainty, and potentially fuel inflation if implemented haphazardly.
FINAL THOUGHTS
We appreciate your continued support and are committed to delivering strong results. While markets remain unpredictable, we are bullish on America’s future, especially in technology, military strength, and economic leadership. The U.S. remains the world’s most dominant economy, and we believe investors will benefit greatly by staying invested over the long term.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| NVDA | NVIDIA CORP | 8.26% |
| MSFT | MICROSOFT CORP | 7.45% |
| AAPL | APPLE INC | 7.06% |
| NFLX | NETFLIX INC | 6.93% |
| AMZN | AMAZON.COM INC | 5.31% |
| DIS | WALT DISNEY CO/THE | 4.99% |
| AVGO | BROADCOM INC | 4.88% |
| BX | BLACKSTONE INC | 4.86% |
| TT | TRANE TECHNOLOGIES PLC | 4.73% |
| IBIT | ISHARES BITCOIN TRUST ETF | 3.85% |
As of 12.31.2024. Cash is not included. Holdings subject to change.
Regards,
Ross Gerber | Gerber Kawasaki | President and CEO
AdvisorShares Gerber Kawasaki ETF (GK) Portfolio Manager
Past Manager Commentary
Definitions:
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.
Russell 2000 Index is a stock market index that measures the performance of the 2,000 smaller companies included in the Russell 3000 Index.
Dow Jones Industrial Average is a stock market index that tracks 30 large, publicly-owned blue-chip companies trading on the New York Stock Exchange (NYSE) and Nasdaq stock exchange.
NASDAQ Composite Index is a market capitalization-weighted index of more than 2,500 stocks listed on the Nasdaq stock exchange.
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus or summary 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.
There is no guarantee that the Fund will achieve its investment objective. An investment in the Fund is subject to risk, including the possible loss of principal amount invested. Investing in mid and small capitalization companies may be riskier and more volatile than large cap companies. Because it intends to invest in value stocks, the Fund could suffer losses or produce poor results relative to other funds, even in a rising market, if the Sub-Advisor’s assessment of a company’s value or prospects for exceeding earnings expectations or market conditions is incorrect. Other Fund risks include market risk, equity risk, large cap risk, liquidity risk and trading risk. Please see prospectus for details regarding risk.
Investing involves risk including possible loss of principal. The Sub-Advisor’s judgment about the markets, the economy, or companies may not anticipate actual market movements, economic conditions or company performance, and these factors may affect the return on your investment. When models and data prove to be incorrect or incomplete, any decisions made in reliance thereon expose the Fund to potential risks. In addition, the use of predictive models has inherent risk. Because predictive models are usually constructed based on historical data supplied by third parties, the success of relying on such models may depend heavily on the accuracy and reliability of the supplied historical data. The prices of growth stocks are based largely on projections of the issuer’s future earnings and revenues. If a company’s earnings or revenues fall short of expectations, its stock price may fall dramatically.
Companies involved in the cannabis industry face competition, may have limited access to banks, limited resources due to litigation and are dependent on receiving necessary permits and authorizations to engage in medical cannabis research or to cultivate, possess or distribute cannabis. The possession and use of cannabis, even for medical purposes, is illegal under federal and certain states’ laws, which may negatively impact the value of the Fund’s investments.
The value of stocks of technology companies tend to be more volatile than the overall market and are vulnerable to rapid changes in technology, rapid product obsolescence, the loss of patent, copyright and trademark protections and government regulation and competition. The expansion of online gambling (both regulated and unregulated), including the award of additional licenses or expansion or relocation of existing gambling companies, and competition from other leisure and entertainment activities, could impact these companies’ finances. Companies within the biotech industry invest heavily in research and development, which may not lead to commercially successful products.
Diversification does not guarantee favorable returns. While the fund invests across multiple thematic trends it is considered a “non-diversified fund” under federal law, the Fund may invest a greater percentage of its assets in a particular issuer and hold a smaller number of portfolios securities.
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.