GK: 1st Quarter 2023 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/gk.


I’m pleased to say that the AdvisorShares Gerber Kawasaki ETF (ticker: GK) had its best quarter in its history in Q1 2023. This was led through the outperformance of the main sectors that the GK invests in. The fund has been able to take advantage of this reversal in markets with the type of outperformance that I expect in a more bullish investment environment.

As the markets digest the slowdown in inflation and the interest rate hiking cycle comes to an end, growth stocks are back into the forefront of investors’ interest. GK’s  position in technology benefited performance greatly in Q1, led by Microsoft, Nvidia, Apple and Tesla. GK also saw outperformance in the consumer discretionary sector of the fund, led by Nike and Topgolf/Callaway.

New positions have been added to the fund to take advantage of emerging opportunities. We believe we will see much higher consumer spending and travel from consumers in China in the post COVID era. To take advantage of this, Las Vegas Sands was added to the portfolio for exposure to the gaming and leisure sectors in Asia. During Q1, the market saw a decline in banking stocks – to which GK had no exposure. However, the banking crisis caused an overall decline in the financial sector and GK’s position in LPL Financial was affected. Because we believe LPL’s sell-off was unfounded, we used the lower prices during Q1 as an opportunity to aggressively add to the fund’s position in LPL. Some of GK’s Tesla position was trimmed in Q1 as it became too overweight in the portfolio relative to overall expectations for performance. Tesla has continued to cut prices of their vehicles, eating into profits for shareholders. Earnings expectations for Tesla have declined from $6 six months ago to $4 today which led us to lower our price target for Tesla as well as our allocation. While we believe many of the actions taken by Tesla’s CEO, Elon Musk, have been detrimental to Tesla’s sales and profit, we feel its long term story remains intact and Tesla continues to be in a top position in GK. Because we believe the return of consumers to the movie theaters as well as travelers from China will supply a big boost to physical entertainment business, we added to our position in Disney throughout the quarter. We also feel streaming entertainment led by companies like Netflix will continue to profit with new austerity. And a renewed focus on quality over quantity. Over the last quarter, we’ve witnessed tremendous cost discipline come into corporate America which we expect to lead to higher than expected profits in 2023 for the companies owned by GK.

Currently, market expectations for 2023 are quite low, but we believe there is a substantial chance of outperformance beyond this outlook. We have not moved into the bull camp yet because we feel that until the Federal Reserve has stopped its interest rate hike program, we are at risk of a recession. Although we expect the Fed to discontinue hikes after its next meeting in May. Once we are able to assess the Fed’s damage to the economy, we will be in a better position to make aggressive investment decisions.

We are pleased with the performance of the fund in Q1 with an overall return of 14.1% versus the S&P 500 benchmark of 7.5%. This type of performance is in line with what we expect. We appreciate your support through a very difficult period of time and hope to be able to continue our outperformance for many years to come in the new bull market. As we enter Q2, we will begin to see how the changes in interest rates will affect earnings, as well as the economy. Time is the only solution in discovering where the next move in markets will be.

Top Holdings

Ticker Security Description Portfolio Weight %
DE DEERE & CO 3.90%

As of 03.31.2023. Cash is not included. Subject to change.  

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

Past Manager Commentary


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.

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.