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FNG: December 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/fng.

Portfolio Review

For the month of December,  the AdvisorShares New Tech and Media ETF (FNG) was down -11.23% compared to a loss of -9.03% in the S&P 500 and loss of -8.92% in the NASDAQ. The “FANG” stocks (Facebook, Amazon, Netflix, Google) were down -8.92% for the month.

One of the bigger winners for the FNG fund in the month of December was Marin Software (NASDAQ: MRIN) which we made 42% from our Dec 19th purchase in the month due to a revenue-share agreement with ALPHABET INC (GOOG).  Marin said it will receive revenue payments from GOOG based on “revenue generated on the company’s tech platform in connection with the company’s clients spend on Search Ads appearing on GOOGLE search only.  We looked at the company after the news as only a short term hold and took profits within a week’s holding period selling the position on Dec 24th.

Another larger position we held throughout the month was Amarin Corp (AMRN) with holding percentages of 6-12% during December.  AMRN was falling in sympathy with the market and the reason we decided to cut the position going into year-end.   We are still bullish on the company after its blockbuster REDUCE-IT study outcome but looking for a better reentry point after we see market stabilization.

Overall the month of December was one of the worst in a the past decade with major indices coming close to bear market territory and the Russell 2000 moving into a bear market .  Some of the leading causes were global economic slowdown , interest rates, diminishing liquidity and trade (China).

Top 10 Holdings

Stock Ticker Security Description Portfolio Weight %
AMZN AMAZON.COM INC 12.83%
CTXS CITRIX SYSTEMS INC 5.66%
AMD ADVANCED MICRO DEVICES 5.12%
AEYE AUDIOEYE INC 4.56%
SQ SQUARE INC – A 4.55%
I INTELSAT SA 4.49%
VMW VMWARE INC-CLASS A 4.39%
BABA ALIBABA GROUP HOLDING-SP ADR 4.33%
ROKU ROKU INC 4.32%
TWLO TWILIO INC – A 4.27%

As of 12.31.2018.

Respectfully,

Scott Freeze, CIO
Sabretooth Advisors
AdvisorShares New Tech and Media ETF (FNG) 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.

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.