FNG

AdvisorShares New Tech and Media ETF

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 month end performance, please click www.advisorshares.com/fund/FNG.

August 2018 Portfolio Manager Review


For the month of August, the New Tech and Media ETF (FNG) was up 7.84% in NAV compared to gains of 3.26% in the S&P 500 and 5.78% in the Nasdaq Composite Index.  

August was a positive month for both FNG and the overall markets, and the end of the core earnings season. There was a slowdown in the geo-political rhetoric on tariffs and NAFTA, and fairly strong earnings for most companies. For the month, core holding Amazon (NASDAQ: AMZN) was up 13.23%,  Alphabet (NASDAQ: GOOG) was flat at 0%, Square Inc (NYSE: SQ) was up 37.11% and Netflix (NASDAQ; NFLX) up 8.96%. Overall the biggest gainers for FNG were Advanced Micro Devices (NASDAQ: AMD) at 37.31%, SQ at 37.11%, Zebra Technologies (NASDAQ: ZBRA) at 24.51% and Cyber-Ark Software (NASDAQ:CYBR) was up 24.22%. The only two detractors in the ETF were Altbaba (NASDAQ: AABA) down 5.31% and Qorvo Inc (NASDAQ: QRVO) down just under one percent at 0.92%.

As stated previously, July was an extremely volatile month for the general markets as well as FNG, but August was just the opposite with both FNG and the general markets seeing strong and steady increases throughout the month. August saw the end of the core earnings season and part of the gains can be attributed to a bounce back effect from companies that announced earnings in July. If you recall, a number of companies were showing top and bottom line beats but saw their stock price get hit. Those names that showed strong earnings but sold off on the news recovered nicely in the month of August. To that point,  our August 1st rebalance into a smaller, but more concentrated, basket for FNG seems to have worked out well as the Investment Committee had stated last month,  “It is the belief of the Investment Committee that the stocks chosen to form the concentrated portfolio have much stronger fundamentals than the current price represented, and that while most issues were weak technically after the post earnings sell off and NASDAQ moving into correction territory, the stocks in the July 31 to August 1 rebalance proved too good to pass up at their current price points.”

It’s interesting to note that the August portfolio construction was almost 45% in Software/Cloud names, 20% in Communications and 5G names, 13% in Internet Retailers, 14% in Semiconductors, and the remaining makeup in Robotics and I/T Hardware, yet the top ten performers for the ETF were spread through almost every sector.  The underlying portfolio of 40% cloud, 20% semis, 20% communications, 10% Internet Retailers and 10% IT/Hardware shows that the moves were company specific and not related to a particular hot sector as we had seen in previous months.

Respectfully,

Scott Freeze, chief investment officer of
Sabretooth Advisors, portfolio manager of FNG

 


July 2018 Commentary

Top Ten Holdings

Ticker Company Portfolio Weight %
SQ Square Inc 6.98%
GOOG Alphabet Inc 6.14%
PANW Palo Alto Networks Inc. 5.76%
AMZN Amazon.com Inc. 5.40%
ISRG Intuitive Surgical Inc. 4.89%
IRDM Iridium Communications Inc 4.46%
NEWR New Relic Inc 4.38%
APPF Appfolio Inc. - A 4.31%
NTAP Netapp Inc. 4.30%
ZBRA Zebra Technologies Corp-Cl A 3.98%

 

Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus and summary prospectus which can be obtained by visiting www.advisorshares.com. Please read the prospectus and summary 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. When the Fund focuses its investments in a particular industry or sector, financial, economic, business, and other developments affecting issuers in that industry, market, or economic sector will have a greater effect on the Fund than if it had not done so. Market or economic factors impacting technology companies and companies that rely heavily on technological advances could have a major effect on the value of the Fund’s investments. Shares of the Fund may trade above or below their net asset value (“NAV”). The trading price of the Fund’s shares may deviate significantly from their NAV during periods of market volatility. There can be no assurance that an active trading market for the Fund’s shares will develop or be maintained. In addition, equity markets tend to move in cycles which may cause stock prices to fall over short or extended periods of time. Other Fund risks include market risk, liquidity risk, large cap, mid cap, and small cap risk. Please see prospectus for details regarding risk.

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.

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.

The Nasdaq Composite Index is the market capitalization-weighted index of approximately 3,000 common equities listed on the Nasdaq stock exchange.