HDGE: 4th Quarter 2023 Portfolio Review

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​For the fourth quarter of 2023, the AdvisorShares Ranger Equity Bear ETF (HDGE) -10.43% (market) while the S&P 500 was 11.69%.

Markets Review

The market rally in the fourth quarter was impressive. As a result, short positions suffered sharp losses. Market participants are front running the expectation that interest rates will fall sharply in the coming months. While the amount and timing of cuts vary, the consensus expectation is for sharp cuts. While lower rates are beneficial to stocks, we remain skeptical of the overall fundamentals. As a result, we remain aggressively positioned to potentially benefit from a sharp pullback in stocks over the coming months.

Due to the conditions detailed below, we expect to remain closer to fully invested on the short-side along with higher beta positions in mid-cap growth stocks.

First, the S&P 500 Bullish Percent Index is now on a “sell” signal. “Bullish percents” represent the percentage of stocks in bullish patterns using point and figure charting, a technical method, devised over a century ago, to analyze stocks.

Source: StockCharts.com, as of 01.17.2024.

Furthermore, the Sector Sum Indicator, which measures the bullish percent signals on 40 different sectors is also on a “sell” signal.

Source: Stockcube Research, as of 01.19.2024

While these technical indicators have hit “sell” signals, the sentiment of the market is extremely bullish. The spread between bullish advisors and bearish advisors has now hit 40. As a result, we are concerned about the underlying technical situation (bearish) with the overall market sentiment (extremely bullish). We are concerned this diverging relationship between technicals and sentiment could set up future disappointments.

As of 01.02.2024

Lastly, we are concerned that the consumer is stretched, and this will filter through to earnings over the coming year. Delinquency rates have hit multi-decade highs.

From January 1991 – September 2023.

As a result, the portfolio remains aggressively short.

Top Holdings

Top 3 Contributors in Q4 2023:

SHLS Shoals Technologies Group, Inc. +0.56%
GOGO Gogo, Inc. +0.19%
BFH Bread Financial Holdings, Inc. +0.06%

Bottom 3 Contributors in Q4 2023:

PI Impinj, Inc. -1.02%
FL Foot Locker, Inc. -0.73%
SPT Sprout Social, Inc. -0.63%


Ticker Security Description Portfolio Weight %

As of 12.31.2023. Cash not included. Subject to change.

Brad Lamensdorf

Brad Lamensdorf                   Jon DelVecchio
Ranger Alternative Management
AdvisorShares Ranger Equity Bear ETF (HDGE) Co-Portfolio Managers

Past Commentary


The S&P 500 Index is a free-float capitalization-weighted index based on the common stock prices of 500 American companies. It is one of the most commonly followed equity indices and many consider it the best representation of the market and a bellwether for the U.S. economy.

A Bear Market (Bearish) is a market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. As investors anticipate losses in a bear market and selling continues, pessimism only grows. Although figures can vary, for many, a downturn of 20% or more in multiple broad market indexes, such as the Dow Jones Industrial Average (DJIA) or Standard & Poor’s 500 Index (S&P 500), over at least a two-month period, is considered an entry into a bear market.

A Bull Market (Bullish) is a financial market of a group of securities in which prices are rising or are expected to rise. The term “bull market” is most often used to refer to the stock market, but can be applied to anything that is traded, such as bonds, currencies and commodities.

The CNN Business Fear & Greed Index is a compilation of seven different indicators that measure some aspect of stock market behavior. They are market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility, and safe haven demand. The index tracks how much these individual indicators deviate from their averages compared to how much they normally diverge. The index gives each indicator equal weighting in calculating a score from 0 to 100, with 100 representing maximum greediness and 0 signaling maximum fear.

The Dow Jones Industrial Average (DJIA) is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes.

The Nasdaq 100 Index is a stock index of the 100 largest companies by modified market capitalization trading on Nasdaq exchanges, excluding companies in the financial sector.

A short position is the sale of a borrowed investment with the expectation that it will decline in value.

Volatility is a statistical measure of the dispersion of returns for a given security or market index. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. Commonly, the higher the volatility, the riskier the security.

Implied Volatility is the estimated volatility of a security’s price. In general, implied volatility increases when the market is bearish and decreases when the market is bullish. This is due to the common belief that bearish markets are more risky than bullish markets.

The Volatility Index (VIX) is the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant
to be forward looking and is calculated from both calls and puts. The VIX is a widely used measure of market risk and is often referred to as the “investor fear gauge”. The VIX is a contrarian sentiment indicator that helps to determine when there is too much optimism or fear in the market.

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. The Fund may invest in (or short) ETFs, ETNs and ETPs. In addition to the risks associated with such vehicles, investments, or reference assets in the case of ETNs, lack of liquidity can result in its value being more volatile than the underlying portfolio investment. Other Fund risks include market risk, equity risk, short sales and leverage risk, large cap risk, early closing risk, liquidity risk and trading risk. Short sales involve leverage because the Fund borrows securities and then sells them, effectively leveraging its assets. The use of leverage may magnify gains or losses for the Fund. See prospectus for specific risks and details.

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 change.

The views in this commentary are those of the portfolio manager and many not reflect his views on the date this material is distributed or any time thereafter. These views are intended to assist shareholders in understanding their investments and do not constitute investment advice.