HVAC: 1st Quarter 2025 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/hvac.
Portfolio
PERFORMANCE
Launched on February 3, 2025, HVAC has faced early headwinds, primarily driven by escalating trade tensions and a renewed focus on industrial tariffs. From inception through the end of Q1 2025, the fund declined -11.53% on a net asset value (NAV) basis and -11.52% on market price, underperforming the S&P 500, which fell -6.16% over the same period. Tariff-related pressures have weighed heavily on key sectors within the HVAC and broader industrials space, limiting early momentum for the fund.
PORTFOLIO
Since its launch, HVAC has made several portfolio adjustments to navigate a challenging economic and policy environment. New positions added during the quarter include:
- AES Cor. (AES): 2,000 shares
- The Azek Co. Inc. (AZEK): 300 shares
- Digital Reality Trust Inc. (DLR): 200 shares
Several positions were removed to refine the fund’s exposure amid ongoing tariff and supply chain volatility:
- Aaon Inc. (AAON)
- API Group Corp. (APG)
- Ferguson Enterprises Inc. (FERG)
- Honeywell International Inc. (HON)
- Lousiana-Pacific Corp. (LPX)
- O. Smith Corp. (AOS)
The portfolio continues to adapt tactically to macroeconomic conditions, with a particular focus on mitigating exposure to tariff-sensitive inputs and strengthening allocations in companies with resilient supply chain structures.
WINNERS AND LOSERS
A handful of holdings delivered positive performance since launch:
- Wildan Group Inc. (WLDN) up 9.60%
- Watsco Inc. (WSO) up 6.76%
- Johnson Controls International (JCI) up 2.51%
However, several names were negatively impacted by tariff-related uncertainty and broader market weakness:
- Vertiv Holdings (VRT) down -34.95%
- Graham Corp (GHM) down -34.59%
- The Middleby Corp. (MIDD) down -25.28%
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| MSOS | ADVISORSHARES PURE US CANN | 34.64% |
| HITI | HIGH TIDE INC | 11.94% |
| VFF | VILLAGE FARMS INTERNATIONAL | 8.84% |
| SNDL | SNDL INC | 7.19% |
| JAZZ | JAZZ PHARMACEUTICALS PLC | 6.39% |
| CRON | CRONOS GROUP INC | 5.02% |
| REFI | CHICAGO ATLANTIC REAL ESTATE | 4.94% |
| CRDL | CARDIOL THERAPEUTICS INC-A | 4.17% |
| OGI | ORGANIGRAM HOLDINGS INC | 3.74% |
| ROMJF | RUBICON ORGANICS INC | 1.96% |
As of 3.31.2025. Cash is not included. Holdings are subject to change.
Please see our complete Fund holdings at advisorshares.com/etfs/hvac. The holdings details are updated each market day.
HVAC & Industrials Landscape
The HVAC industry has entered a complex phase of geopolitical and economic recalibration. As tariff pressures rise, companies face new obstacles in global sourcing, raw material pricing, and equipment delivery timelines. Many are being forced to re-evaluate supply chains, diversify sourcing strategies, and build in flexibility to mitigate disruption. The reintroduction of tariffs on industrial components, particularly those sourced from China and other trade-sensitive regions, has had a disproportionate impact on the capital goods and building products sectors.
To weather these disruptions, HVAC companies are exploring contingency planning through inventory stockpiling, supplier diversification, and cost pass-through strategies. Meanwhile, advocacy efforts are intensifying, with trade organizations pushing for exemptions on critical HVAC components to reduce economic friction and preserve competitiveness.
Despite short-term challenges, the industry remains well-positioned for long-term growth. HVAC systems are a foundational component of modern infrastructure and play a vital role in sustainable construction, commercial real estate, and smart building technologies. Innovations such as geothermal systems, intelligent climate control, and advanced filtration have helped modernize the industry and improve its resilience.
According to industry forecasts, the global HVAC market is projected to reach $367 billion by 2030, driven by increased construction activity, urbanization, and tightening energy-efficiency standards worldwide.1 As ESG and climate-forward policies accelerate investment into green infrastructure, HVAC companies are expected to play a central role in driving sustainable building solutions globally.
While tariff-related uncertainty may continue to challenge industrial stocks in the near term, HVAC remains focused on companies poised to benefit from the ongoing modernization of infrastructure and energy systems. The fund will continue to adapt to evolving trade and regulatory developments, while prioritizing innovation-driven, cost-resilient businesses across the HVAC ecosystem.
1 Benchmark International, 2024 Construction Spotlight: Global HVAC Industry Report, May 2024.
——————————————————————-
Tune in to AdvisorShares’ AlphaNooner Show streaming live each regular weekday starting at 12:00 pm (East Coast time), where I am a guest almost every Tuesday. Find it on most major social media platforms or visit our the AdvisorShares “Events” webpage for more information.
Cheers,
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus or summary 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.
An investment in the Fund is subject to risk, including the possible loss of principal amount invested. There is no guarantee that the Fund will achieve its investment objective.
HVAC Companies Risk. HVAC companies are subject to a variety of factors that may adversely affect their business or operations, including costs associated with environmental and other regulations, the effects of an economic slowdown, surplus capacity or technological obsolescence, industry competition, labor relations, rate caps or rate changes and other factors. Certain HVAC companies may be subject to extensive regulation by various governmental authorities. The costs of complying with governmental regulations, delays or failures to receive required regulatory approvals or the enactment of new adverse regulatory requirements may adversely affect HVAC companies. HVAC companies may also be affected by service interruption and/or legal challenges due to environmental, operational or other conditions or events, and the imposition of special tariffs and changes in tax laws, regulatory policies and accounting standards. There is also the risk that corruption may negatively affect publicly-funded infrastructure projects, especially in non-U.S. markets, resulting in work stoppage, delays and cost overruns. Other risks associated with HVAC companies include uncertainties resulting from such companies’ diversification into new domestic and international businesses, as well as agreements by any such companies linking future rate increases to inflation or other factors not directly related to the actual operating profits of the enterprise. HVAC companies also can be significantly affected by the national, regional and local real estate markets.
American Depositary Receipt Risk. ADRs have the same currency and economic risks as the underlying non-U.S. shares they represent. They are affected by the risks associated with non-U.S. securities, such as changes in political or economic conditions of other countries, changes in the exchange rates of, or exchange control regulations associated with, foreign currencies, and differing accounting, auditing, financial reporting, and legal standards and practices. In addition, investments in ADRs may be less liquid than the underlying securities in their primary trading market.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual issuers, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
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 any time thereafter. These views are intended to assist shareholders in understanding their investments and do not constitute investment advice.