HDGE: 2nd Quarter 2026 Portfolio Review
Performance
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| OZK | BANK OZK | -3.16% |
| ALRM | ALARM.COM HOLDINGS INC | -2.84% |
| ARE | ALEXANDRIA REAL ESTATE EQUIT | -2.81% |
| OMF | ONEMAIN HOLDINGS INC | -2.78% |
| AMH | AMERICAN HOMES 4 RENT- A | -2.54% |
| INVH | INVITATION HOMES INC | -.2.52% |
| PRU | PRUDENTIAL FINANCIAL INC | -.2.46% |
| ALLY | ALLY FINANCIAL INC | -2.44% |
| PFBC | PREFERRED BANK/LOS ANGELES | -2.42% |
| CVSA | COVISTA INC | -2.27% |
As of 06.30.2026. Cash not included. Holdings subject to change.
Markets Review
Furthermore, market sentiment swung from excessive bearishness to conditions that indicate potential market weakness going forward.
The chart below, from Investors Intelligence, tracks the difference between bullish and bearish investment advisors. Here’s how I’m interpreting it today.
As you can see from the chart below, bullish sentiment has risen sharply while bearish sentiment has fallen. Historically, readings above +30% suggest investors are becoming increasingly optimistic, and readings above +40% have often preceded periods of market weakness.
As the market rebounded and sentiment became too bullish in our view, we increased short exposure toward the maximum and in aggressive positions.
Source: Investors ; The Advisors Sentiment Report, July 2024 to July 2026.
The second quarter, and 2026 in particular, have offered opportunities with plenty of companies reporting poor earnings quality based on our research combined with deteriorating technical conditions, suggesting that capital is flowing out of these companies.
Furthermore, according to recent Federal Reserve data, U.S. households now have a record share of their financial assets invested in stocks. This data provides cause for concern as too many households already own stocks and buying power has already been deployed.
The year started with a record allocation to equities and a historically rich multiple to earnings for the S&P 500.
Source: Federal Reserve Flow of Funds; J.P. Morgan Flows & Liquidity; Q4 2025
As a result of over-optimism and historically elevated valuations, we expect the portfolio to remain aggressively short for the foreseeable future.
Brad Lamensdorf Jon DelVecchio
Ranger Alternative Management
AdvisorShares Ranger Equity Bear ETF (HDGE) Portfolio Managers
Past Commentary
Beta – a financial metric that measures how much a specific stock’s price moves in relation to the overall market. It is a key indicator of volatility, how wildly a stock swings, and helps investors understand the risk of adding a position to their portfolio.
P/E 10 ratio – a valuation indicator, commonly used with major equity indexes, factoring in real per-share earnings over a 10-year period. It is also known as the cyclically adjusted price earnings ratio.
Crestmont P/E ratio – a valuation metric that compares the price of a stock or the overall market to its earnings, specifically using the average earnings over a ten-year period.
Q Ratio – a valuation method that divide the market value of a company by the replacement value of the firm’s assets; also known as Tobin’s Q.
Equity risk premium – represents the additional return stocks offer over risk-free investments like Treasury bills, compensating investors for higher risks.
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 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.
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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.