VICE: 1st Quarter 2021 Portfolio Manager 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/vice.

On November 1, 2020, the AdvisorShares Vice ETF changed its ticker from ACT to VICE and made a change to its investment strategy. See the prospectus for more information.

Commentary

The first quarter of 2021 was very strong again for AdvisorShares Vice ETF (NYSE: VICE). The Fund gained 12.41% on its net asset value (NAV) and 12.47% on its market price. The S&P 500 was only up 6.17% for the period.  For the full year April1, 2020 through March 31, 2021, VICE gained 82.09% on its NAV and 83.42% on market price while the S&P 500 returned 56.35%. Remember that on April 1, 2020, the overall market was still near COVID-induced lows.  

Following Fund changes we made in the 4th quarter of 2020 – changed the ticker to VICE, moved to the NYSE,  and expanded the Fund’s principal investment strategy to add gaming, food, and an entertainment focus – we have continued to add new positions.

New Positions:

In the 1st quarter, we added Psilocybin company COMPASS Pathways plc (NASDAQ: CMPS), wine maker Duckhorn Portfolio, Inc. (NYSE: NAPA), and multiple gaming-related companies Draft Kings Inc. (NASDAQ: DKNG), Caesars Entertainment, Inc. (NASDAQ: CZR), Gaming and Leisure Properties, Inc, (NASADQ: GLPI), Red Rock Resorts, Inc. (NASDAQ: RRR), and Full House Resorts, Inc. (NASDAQ: FLL).

Contributors / Detractors:

The Fund’s largest holding Boston Beer (NYSE: SAM) is one that I must always talk about. It was up yet again, another 21.32% for the 1st quarter. It’s been a terrific performer for a long time. The second largest holding, Turning Point Brands (NYSE: TPB), was up 17.20%. It’s officially a tobacco company, but not viewed as “big tobacco” and carrying a heavy cannabis focus. The leading contributor from the restaurant and bar area was Chuy’s Holdings – a Texas-based stock I feel few people know about – which gained 67.31% for the quarter. They also happen to have an excellent happy hour. Headphone maker Turtle Beach Corp (NASDAQ: HEAR) was up another 23.76% in Q1. Casino gaming is also a solid contributor with Penn National Gaming (NASDAQ: PENN) +21%, Boyd Gaming (NYSE: BYD) + 37%, Full House Resorts (NASDAQ: FLL) + 35%, and Red Rock Resorts (NASDAQ: RRR) + 26%, all adding solid gains.

On the negative side, there were fewer losers than winners and most were smaller weighted positions.  COMPASS Pathways plc (NASDAQ: CMPS) was down 28% for the full quarter. Take Two Interactive (NASDAQ: TTWO) -14%. A handful of alcohol companies were down in Q1, Brown-Forman (NYSE: BF.b) -12%, The Duckhorn Portfolio (NYSE: NAPA) –13%, and Anheuser-Busch InBev (NYSE: BUD) –10%.

Like I said last quarter, for those concerned about stock market negativity or volatility with new Presidential policies, I’d like to suggest investing in those things that citizens seem to spend money on no matter what’s happening with the economy or politics – I mean vices like drinking, smoking, gambling and gaming.

Top Holdings

Ticker Security Description Portfolio Weight %
SAM BOSTON BEER COMPANY INC-A 7.38%
TPB TURNING POINT BRANDS INC 5.99%
HEAR TURTLE BEACH CORP 5.57%
EAT BRINKER INTERNATIONAL INC 5.02%
JACK JACK IN THE BOX INC 4.57%
PENN PENN NATIONAL GAMING INC 4.38%
GLPI GAMING AND LEISURE PROPERTIE 3.72%
VICI VICI PROPERTIES INC 3.56%
TACO DEL TACO RESTAURANTS INC 3.56%
FLL FULL HOUSE RESORTS INC 3.43%

As of 03.31.2021. Cash is excluded.

Please see our complete Fund holdings at advisorshares.com/etfs/vice. The holdings details are updated each market day.

Cheers,

Dan Ahrens
AdvisorShares
AdvisorShares Vice ETF (VICE) Portfolio Manager

 

Past Manager Commentary

Definitions:

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.


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.

Investing involves risks including possible loss of principal. Companies in the food, beverage and tobacco industry are very competitive and subject to a number of risks. Demographic and product trends, changing consumer preferences, nutritional and health-related concerns, competitive pricing, marketing campaigns, environmental factors, adverse changes in general economic conditions, government regulation, food inspection and processing control, consumer boycotts, risks of product tampering, product liability claims, and the availability and expense of liability insurance can affect the demand for, and success of, such companies’ products in the marketplace. For a full summary of the risks, please see the prospectus.

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.