Breaking down the Gerber Kawasaki ETF – here’s what you need to know

President & CEO of Gerber Kawasaki Wealth and Investment Management, Ross Gerber alongside sponsor AdvisorShares recently launched the AdvisorShares Gerber Kawasaki ETF (NYSE:GK). The Exchange Traded Fund (ETF) has picked up the attention of Wallstreet, as Gerber aims to “identify growth companies positioned to benefit from transformative changes in our society”.

The ETF began trading on the 2nd July and has gained 3.29% since inception. With investor interest increasing in the “Roaring 20s” ETF, this article will aim to breakdown everything investors need to know.

What is the main purpose of Gerber Kawasaki ETF (NYSE:GK)

The Gerber Kawasaki ETF is composed of multiple investment themes which are spread across a portfolio of large, mid and small cap stocks. In particular, Gerber aims to create portfolio exposure across a variety of long-term macro trends. So what does that look like?

The investment themes are widespread and include emerging industries such as Clean energy, Fintech and Artificial intelligence to Sport streaming and Bio-tech. The fund also noted interest in emerging markets from legalisation such as Cannabis and Online gambling.

What is the Gerber Kawasaki ETF made up of?

As of August 12, the funds largest holding by portfolio weight (5.73%) is the Global X Lithium & Battery Tech ETF (NYSEARCA: LIT). The Lithium & Battery ETF invests in the full lithium cycle, from mining through battery production. This ETF has performed strongly year-to-date, gaining 31.01%.

The GK ETF is also invested in Tesla, a company with no need for introduction. Tesla holdings currently make up 5.16% of the ETF portfolio. However, Tesla are not the only tech giants in the portfolio with Microsoft and NVDIA also claiming a 4% and 4.28% weighting respectively.

Another honourable mention is Moderna, the COVID-19 vaccine candidate that delivered 199 Million COVID-19 vaccine doses in the last quarter. Moderna’s weighting in the ETF us slightly lower than tech giants Tesla and Microsoft, with 3.28%.

The ETF is also made up of many American household names such as Apple, Amazon, Disney, Nike and many others. The entire portfolio is made up of 227 holdings with a vast majority Large cap stocks (78.2%). If you are interested or want more information on the ETF’s holdings visit the AdvisorShares website here.

What investors need to know about ETF’s – (NYSE:GK)

Firstly, an ETF is a fund or a pool of assets that trades as one security on an exchange. The Net Asset Value (NAV) of an ETF is the value of the funds underlying assets per share. Simply put, this can be determined by dividing the combined value of the funds assets by the number of ETF shares outstanding (which varies as investors drive this change).

Why is this important? The NAV calculation will tell the investor how much one share is worth compared to its public trading price. In simple terms, the ETF’s trading price will move with the NAV price as this represents the underlying value of the ETF’s asset per share.

In the case of Gerber Kawasaki’s ETF, the current trading price is $26.10 and the NAV is $26.08. This suggests Gerber’s ETF is trading at a slight premium to what the ETF is worth. In principle, a ETF trading at a premium is good for the seller and not so good for the buyer and vice-versa. This is important to remember when looking at ETF’s as you will know the difference between the fair value (NAV) and the current trading price.

The Bottom Line – AdvisorShares Gerber Kawasaki ETF (NYSE:GK)

Overall, the growing interest in the AdvisorShares Gerber Kawasaki ETF is likely due to the popularity of growth and macro-trends that the ETF aims to capitalise on.

Similar to the ARKK Invest ETF, the focus on clean energy and post-coved life is a bold strategy not seen often enough in the ETF space. We will see over the next 6-12 months how the Gerber Kawasaki ETF performs.

Written by Tyger Fitzpatrick, Founder of Youth Investment Group.

The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

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