GK: 3rd Quarter 2025 Portfolio Review
Commentary
The GK Fund delivered an outstanding third quarter in 2025, rising 9.84% (NAV) | 9.81% (market) over the period. This strong quarter builds on our disciplined positioning and reflects the payoff from several strategic calls made well over a year ago—particularly our early emphasis on the AI theme. Year to date, the fund is up over 20.22% (NAV) | 20.15% (market), marking our third consecutive year of >20% returns, following 2023 and 2024—21.38 (NAV) | 21.07% (market) and 20.22% (NAV) | 20.39% (market), respectively. We are especially proud to deliver these returns while maintaining a balanced risk profile.
Market Backdrop & Tailwinds
The broader equity market also performed strongly in Q3, fueled by optimism around AI, interest rate expectations, and resilient corporate earnings. U.S. stock valuations remain elevated, especially in high-growth segments. At the same time, the Federal Reserve delivered its first 2025 rate cut (–25 basis points) in September, signaling a modest pivot toward easing. That shift, combined with sustained AI investment, underpinned positive investor sentiment.
The AI sector continues to attract massive capital flows. According to Stanford’s 2025 AI Index, AI-driven deployment is increasingly pervasive across industries, with measurable revenue uplift in marketing, supply chain, and services. Private and public AI investments remain elevated, though volatility and valuation risk are broadly acknowledged. That tailwind continues to support many of our key allocations, though we remain vigilant to signs of overextension.
Portfolio Moves & Attribution
- Trimmed / Exited Positions
- We exited Ferrari and On Running due to increasing tariff risk and weak visibility on auto demand. Our original thesis on RACE leaned heavily on their EV transition, which we believe is now less certain.
- Costco was sold after underperforming during inflationary conditions. We judged it was unable to maintain margins or deliver differentiated value in a tight consumer environment.
- New & Added Positions
- IBM: We initiated a position based on its leadership in AI (e.g., Watson) and its growing commitment to quantum computing. It also offers a robust dividend and appears to be evolving into more of a growth-oriented technology holding than a pure value play.
- SoundHound: A small-cap AI/voice systems company serving automation in food service and automotive. We believe it is well positioned in a fast-growing voice/AI interface market.
- CrowdStrike: Reinstated on pullback. Its cybersecurity + AI exposure gives it a favorable risk/return profile in the current environment.
- Ethereum (exposure via ETF): We broadened our digital assets allocation beyond Bitcoin to include Ethereum, diversifying our alternative currency exposure alongside Bitcoin and gold.
- Trimmed Kratos Security: Kratos, a drone / defense tech name, more than doubled in the quarter and was a significant contributor. Given its rapid climb, we trimmed to lock in gains while retaining it as a top-five holding.
- Oracle: A standout in Q3 thanks to accelerating server business and AI-related backlogs, plus the potential for future involvement in TikTok (pending U.S. regulatory developments).
- Gold (exposure via ETF): Also, a standout position for the quarter. Gold has become the place to find safety instead of the US treasury bond. This has led to a massive accumulation of gold from central banks around the world as well as from institutions.
These strategic moves reflect our core philosophy: invest in high-conviction thematic ideas but do so within a diversified, risk-aware framework.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| NVDA | NVIDIA CORP | 7.52% |
| AVGO | BROADCOM INC | 6.55% |
| KTOS | KRATOS DEFENSE & SECURITY | 5.73% |
| GOOG | ALPHABET INC-CL C | 5.52% |
| NFLX | NETFLIX INC | 5.16% |
| MSFT | MICROSOFT CORP | 5.02% |
| TT | TRANE TECHNOLOGIES PLC | 4.34% |
| JPM | JPMORGAN CHASE & CO | 4.04% |
| ORCL | ORACLE CORP | 4.03% |
| GEV | GE VERNOVA INC | 3.92% |
As of 06.30.2025. Cash is not included. Holdings are subject to change.
Outlook
Risk Management & Outlook
Heading into Q4, we are adopting a more cautious stance. The market’s elevated valuations, along with policy shifts and macro uncertainty, call for discipline. While we remain constructive over the next 12 months, we are prepared for a pullback and to reallocate if a correction presents itself. We aim to hold 25–30 core positions, trimming where necessary, to maintain flexibility and balance.
Going forward, we are watching closely:
- Inflation surprises, especially from trade or commodity dynamics
- Further Fed moves (timing and magnitude of cuts)
- Company-level execution in AI / growth names
- Geopolitical and tariff developments
- Market sentiment and valuation extremes
Closing Thoughts
We deeply appreciate your support of the GK Fund. The results this year underscore the strength of our approach: thematic focus, early conviction, and rigorous risk control. We are optimistic about 2026 and beyond and look forward to capitalizing on more compelling opportunities ahead.
Regards,
Ross Gerber | Gerber Kawasaki | President and CEO
AdvisorShares Gerber Kawasaki ETF (GK) Portfolio Manager
Past Manager Commentary
Definitions:
A basis point (BPs) is one hundredth of a percentage point (0.01%).
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.
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