Select Page

FNG: November 2018 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/fund/hdge.

Portfolio Review

For the month of November, the AdvisorShares New Tech and Media ETF (FNG) was down 4.17% compared to a gain of 2.0% in the S&P 500 and loss of 0.25% in the NASDAQ. The “FANG” stocks (Facebook, Amazon, Netflix, Google) were up 1.58% for the month.

One of the bigger winners for the FNG fund is Amazon (NASDAQ: AMZN) which climbed 10% since our 11/27 purchase in the month due to extremely positive Thanksgiving, Black Friday and a record setting Cyber Monday online sales report. With lower guidance going into the holiday season after their Q3 conference call, we feel positive with the latest sales data to continue to hold the now largest company in the world.

Another larger position we hold (12.91%) in the FNG fund and added to in November is Amarin Corp (NASDAQ: AMRN) a midcap biotech company that had record numbers in a 5 year cardiovascular study (REDUCE-IT).  With such blockbuster results, the company has now become a popular takeover rumor and is looking to expand internationally into Europe, China, and the Middle East. There are 45-50 million people alone in the US that suffer from cardiovascular disease and we feel Amarin’s drug, Vascepa, will grow exponentially over the next year to meet this unmet medical need both domestically and internationally.

The Asian “STAB” names bounced a bit off their lows going into the G20 meeting at the end of November and throughout the month with Alibaba (NYSE: BABA) making e-commerce history on 11/10 with 30.8 billion in sales over a 24 hour span as part of the companies Singles Day celebration. FNG purchased the Chinese giant earlier in November when the company was down 42% from its 52 week high. In regards to the G20 meeting, the FNG fund held zero Chinese companies do to the uncertainty of the trade meeting between presidents Trump and Xi.

November was a choppier month where we saw sensitivity in the market on a weekly basis. The fear of the Chinese tariffs along with the hawkish Fed dampened any real strength for the month. Politically, we will be keeping a close eye on the 90-day tariff truce between the US and China and continue to monitor closely the Fed’s possible 2019 rate hike’s.

Top 10 Holdings

Ticker

Security Description

Portfolio Weight %

AMZN

AMAZON.COM INC

12.24%

AMRN

AMARIN CORP PLC -ADR

11.62%

CYBR

CYBERARK SOFTWARE LTD/ISRAEL

6.49%

MSFT

MICROSOFT CORP

5.66%

NVDA

NVIDIA CORP

4.73%

CTXS

CITRIX SYSTEMS INC

4.14%

TWLO

TWILIO INC – A

3.76%

IRDM

IRIDIUM COMMUNICATIONS INC

2.80%

SQ

SQUARE INC – A

2.49%

VMW

VMWARE INC-CLASS A

2.48%

Respectfully,

Scott Freeze, CIO
Sabertooth Advisors
AdvisorShares New Tech and Media ETF (FNG) Portfolio Manager

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.


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.

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.