GK: 1st Quarter 2024 Portfolio Review
Commentary
The first quarter of the year kicked off with a bang for the GK fund. Throughout 2023, the GK fund strategically divested from many of its climate-related positions as they suffered a significant decline, largely attributed to higher interest rates dampening demand for solar power and EV cars. The culmination of this strategic shift was the reduction of our allocation to Tesla, which had been a top investment since the inception of the fund.
The challenges facing Tesla were predominantly self-inflicted, stemming from Elon Musk’s behavior as CEO. However, our initial foresight recognized that Musk’s actions, coupled with ineffective product advertising strategies and an economic slowdown in China, would exert pressure on Tesla’s sales. Consequently, we substantially reduced our position in Tesla and other climate-related investments, instead increasing our investment in AI and technology-related ventures.
This pivot during the first quarter of 2024 yielded remarkable results for the fund. While Tesla emerged as the worst-performing stock in the S&P 500, Nvidia, our new top holding, soared, contributing to GK’s return of 14.76% (NAV) in Q1, significantly outpacing the S&P 500, which was 10.56%. We are exceptionally pleased with this outcome and remain steadfast in our focus on the technology and consumer segments of our portfolio, anticipating favorable returns for our shareholders.
We continue to favor healthcare and financial sectors, particularly companies like Blackstone and LPL Financial, which boast reasonable valuations and promising growth prospects. Additionally, we see considerable potential in companies like Novo Nordisk, with their weight loss drugs experiencing strong demand. Healthcare and financials remain undervalued in our view, presenting ongoing opportunities for investment.
Despite the higher valuations in the technology sector, we remain committed to seeking opportunities, particularly in artificial intelligence (AI). As we enter a new era of AI development, we are particularly excited about the opportunities it presents, focusing on the hardware infrastructure necessary for AI systems. Our current focus includes increasing investments in chip and hardware makers such as ASML, Nvidia, AMD, Dell and Broadcom.
We have an optimistic outlook for the US economy, anticipating robust consumer spending and resilience throughout the year, despite higher interest rates. The prospect of the Federal Reserve lowering rates further augments this outlook, potentially stimulating real estate and consumer spending. While lower rates have yet to materialize, the continued economic growth, coupled with subsiding inflation, bodes well for the future.
Looking ahead to 2024, we are bullish, buoyed by the upcoming presidential election’s focus on growth and lower interest rates, along with the burgeoning AI thematic boom. We appreciate the ongoing support of our investors and are proud of our performance in 2023 and 2024. As we continue to rebound from the challenges of 2022, we remain committed to delivering value to our shareholders and thank you for your patience and long-term vision.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| NVDA | NVIDIA CORP | 10.03% |
| MGM | MGM RESORTS INTERNATIONAL | 8.45% |
| MSFT | MICROSOFT CORP | 7.59% |
| NVO | NOVO-NORDISK A/S-SPONS ADR | 6.24% |
| LEN | LENNAR CORP-A | 6.12% |
| GOOG | ALPHABET INC-CL C | 5.75% |
| DIS | WALT DISNEY CO/THE | 5.59% |
| AAPL | APPLE INC | 4.69% |
| LPLA | LPL FINANCIAL HOLDINGS INC | 4.63% |
| NFLX | NETFLIX INC | 4.35% |
As of 3.31.2024. Cash is not included. Subject to change.
Regards,
Ross Gerber | Gerber Kawasaki | President and CEO
AdvisorShares Gerber Kawasaki ETF (GK) Portfolio Manager
Regards,
Ross Gerber | Gerber Kawasaki | President and CEO
AdvisorShares Gerber Kawasaki ETF (GK) Portfolio Manager
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