GK: 2nd Quarter 2023 Portfolio Review

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Commentary

The AdvisorShares Gerber Kawasaki ETF (ticker: GK) had a good second quarter which was mostly from gains achieved during the month of June. The first two months of the quarter were mostly churning through the gains we made in Q1.

In June, as rates declined and the AI mega theme took hold, we made, in our opinion, some great gains. The gains were led by positions in the semiconductor industry such as Nvidia and ON Semiconductor. Nvidia gained a tremendous amount of value based off the perception of rapid growth due to AI innovation. Nvidia has being a top holding in GK and has been a great benefit to our shareholders. ON Semiconductor which is more related to the electric vehicle (EV) industry also performed well. Other portfolio holdings also rallied in June based on the perception of a strong consumer buying and the un-likelihood of a recession in the second half of the year. Good results from MGM also helped in June as visitors return to Las Vegas and the travel leisure market continues to grow.

One area that did not perform as well in Q2 was our position in the solar power area. Solar has been a very difficult investment this year for the fund. Our focus on climate investing includes solar and our positions in Enphase and Solaredge declined dramatically. Additionally, we exited our position in Nextera Energy. Although we are very bullish on solar long term, many factors have affected its profitability on the short-term including higher interest rates which have slowed down solar additions. We believe our solar positions will recover value rapidly when rates normalize over the next year or so.

Interest rates continue to play a role in many of our positions including Lennar in the home building area and Tesla / Polestar in the EV area. Because these are interest rate sensitive businesses, they are affected more by Federal Reserve action than other companies. Rates have stayed relatively under control this year so in Q2 we did not see a negative impact from them on our investments. In Q3, while we anticipate potentially higher rates which could impact these positions, we view this as a short term move in long rates and that ultimately we believe lower rates will return over the next several years.

The fund was up over 5.3% (market) in Q2 and is up over 19% in the first half of the year. We are pleased with the results so far as we are outpacing the S&P 500 through the first half of 2023. We are working very hard to recover losses in the fund due to the poor timing of the start of the fund towards the top of the market in 2021. We feel confident as we enter the new bull cycle that our investors will be rewarded for focusing on our mega themes: technology and AI, climate change,  the consumer and beyond. We are looking forward to the rest of the year to achieving results for our shareholders.

Top Holdings

Ticker Security Description Portfolio Weight %
TSLA TESLA INC 8.53%
MGM MGM RESORTS INTERNATIONAL 6.90%
MSFT MICROSOFT CORP 6.62%
NVDA NVIDIA CORP 5.99%
AAPL APPLE INC 5.89%
LPLA LPL FINANCIAL HOLDINGS INC 4.68%
NFLX NETFLIX INC 4.46%
LVS LAS VEGAS SANDS CORP 4.01%
ON ON SEMICONDUCTOR 3.95%
DIS WALT DISNEY CO/THE 3.74%

As of 06.30.2023. Cash is not included. Subject to change.  

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Regards,
Ross Gerber | Gerber Kawasaki | President and CEO
AdvisorShares Gerber Kawasaki ETF (GK) Portfolio Manager

Definitions:

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