SURE: 1st Quarter 2024 Portfolio Review
Portfolio Review
The AdvisorShares Insider Advantage ETF (SURE) has presented a commendable performance in the first quarter of 2024 with a gain of 11.84% (NAV), surpassing not only the broader market indices such as the S&P 500 and its equal-weight variation but also eclipsing other competitor products focused on stock buybacks. This robust performance showcases SURE’s effective strategy and its successful adaptation to market dynamics, helping investors navigate in a period marked by diverse economic signals.
The continuation of aggressive stock buyback programs has played a pivotal role in SURE’s strategy. In the first quarter alone, U.S. public companies announced $301 billion in new buyback capacities, maintaining the momentum observed from the previous year. Notably, Meta Platforms, one of the holdings within SURE, unveiled a $50 billion expansion in its buyback program, a move that likely bolstered investor confidence in the ETF’s strategic direction.
Source: Qubed Capital, LLC. As of 3.31.2024.
Diving deeper into the ETF’s composition reveals a dynamic quantitative approach that has served its investors well. For instance, SURE allocated nearly 11% of its portfolio to energy companies—almost three times the sector’s representation in the S&P 500. This decision harvested substantial gains amid rising oil prices, underscoring the fund’s adept sector weighting. Similarly, the ETF’s overexposure to industrials and limited engagement with the healthcare sector mirrored broader market trends, further cementing its strong quarterly outcome.
Source: Qubed Capital, LLC. As of 3.31.2024.
The fund’s selective investments in the utilities sector also paid huge dividends. Shares of Vistra (VST) and NRG Energy (NRG), which are the only utilities companies in SURE, soared 81.43% and 31.93%, respectively in Q1 2024. Their enhanced capacity in nuclear power positions them advantageously in a market increasingly driven by demands from vehicle electrification, onshore manufacturing, and burgeoning AI data center needs. This strategic positioning within Utilities underscores SURE’s ability to identify and capitalize on high-potential opportunities.
As the US economy grapples with rising inflation and the cooling of the tech sector rally, SURE offers a compelling alternative investment approach. Its past performance not only reflects a deep synchronization with market dynamics but also an ability to strategically capitalize on these insights, offering investors a viable avenue in a shifting economic environment. By focusing on fundamentally strong companies with aggressive buyback programs and strategic sector plays, SURE provides a protective yet growth-oriented investment strategy that can appeal to investors looking for stability and performance in uncertain times.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| VST | VISTRA CORP | 1.75% |
| CSL | CARLISLE COS INC | 1.22% |
| LRCX | LAM RESEARCH CORP | 1.22% |
| WIRE | ENCORE WIRE CORP | 1.21% |
| KLAC | KLA CORP | 1.20% |
| EXP | EAGLE MATERIALS INC | 1.19% |
| NRG | NRG ENERGY INC | 1.17% |
| PHM | PULTEGROUP INC | 1.17% |
| AXP | AMERICAN EXPRESS CO | 1.16% |
| HLT | HILTON WORLDWIDE HOLDINGS IN | 1.16% |
As of 3.31.2024. Subject to change.
Respectfully,
Minyi Chen
Qubed Capital, LLC
AdvisorShares Insider Advantage ETF (SURE) Portfolio Strategist
Past Commentary
– A buyback (or repurchase) occurs when a company repurchases its own shares from the marketplace, reducing the number of shares outstanding.
– An insider is an officer, director, executive, entity, or individual that owns more than 10% of a publicly traded company’s shares.
– Insider buying is the legal purchase of shares in a firm by a corporate insider that is not based on non-public, material information and follows the U.S. Securities and Exchange Commission’s rules and reporting requirements.
– 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.
*On September 1, 2022, the AdvisorShares DoubleLine Value Equity ETF (the “Predecessor Fund”) was renamed the AdvisorShares Insider Advantage ETF. The Predecessor Fund had different portfolio managers and investment strategy than the AdvisorShares Insider Advantage ETF. Performance prior to September 1, 2022 reflects the Fund’s performance prior to the change in manager and investment strategy and may not be indicative of the Fund’s performance under the new manager and revised investment strategy. Performance since September 1, 2022 reflects actual AdvisorShares Insider Advantage ETF performance.
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 the Fund’s website at www.AdvisorShares.com. Please read the prospectus carefully before you invest. Foreside Fund Services, LLC, Distributor.
The Fund’s investment focus follows a core philosophy that corporate insiders know their companies best. The Advisor believes that insider buying and stock buyback programs not only show that corporate insiders see relative value in investing in their own company’s equity securities, but also create favorable market conditions by reducing public equity float (i.e., the share supply available to investors on the public secondary market). The Advisor allocates the Fund’s portfolio using research from a disciplined and quantitative proprietary model, the U.S. Insiders Edge Model, developed by Qubed Capital, LLC. In utilizing the model, the Advisor seeks to remove emotion from day-to-day decision-making by following a systematic process.
The Fund is an actively-managed exchange-traded fund (“ETF”) that seeks to achieve its investment objective by primarily investing in a portfolio of U.S. traded companies selected from a universe of the largest 3,000 U.S. equity securities based on market capitalization. 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.
The views in this commentary are those of the portfolio manager/strategist 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.