GK: 3rd 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/gk.

Commentary

The third quarter started off on the right foot with markets making a sustained rally on the hope the Federal Reserve and Fed Chairman Powell were getting close to finishing their rate hiking cycle. Markets rallied nicely and GK recovered a lot of value in a short time. That all ended towards the end of August when the Fed’s Powell abruptly changed his tone and slammed the markets down with threats of even higher rates. As a result, markets resumed their bear move and hit new lows by the end of September. We continue to add to our “climate change” theme portfolio positions as we believe the opportunity continues to grow. We also added to our positions in the portfolio’s defense (Northrup) and financial (LPL Financial) themes. We continue to position the portfolio for the eventual end of the rate hiking cycle and expect a possible large rebound in share value when the Fed is done. Overall, we had a better quarter compared to the S&P 500 Index as we had a nice rally in our solar stocks in the quarter. We lowered our exposure to housing and health care as we anticipate slower growth in these areas moving forward relative to our other positions.

Top Holdings

Ticker Security Description Portfolio Weight %
TSLA TESLA INC 12.49%
MSFT MICROSOFT CORP 5.36%
MGM MGM RESORTS INTERNATIONAL 5.20%
AAPL APPLE INC 4.98%
BX BLACKSTONE INC 3.92%
NFLX NETFLIX INC 3.65%
GOOG ALPHABET INC-CL C 3.33%
NVDA NVIDIA CORP 3.21%
DE DEERE & CO 2.91%
NOC NORTHROP GRUMMAN CORP 2.89%

As of 09.30.2022. Subject to change. Cash is not included. 

 

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

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.