| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | -3.5% | 0% |
Spear Alpha ETF declined 3.48% in 3Q24 versus S&P 500's 5.89% gain, navigating macro headwinds including carry trade unwind and election uncertainty. The fund has shifted from defense to offense, positioning for the next technology wave driven by AI. Growth is emerging across three key areas: hardware expansion beyond Nvidia to custom chips and infrastructure, data infrastructure showing positive new business metrics after quarters of decline, and AI applications reaching transformational milestones. The fund expanded its data center hardware exposure to networking and power generation, capitalizing on the 20+ year underinvestment in power infrastructure. Key positions include Nvidia, Tesla as an autonomy play, and data infrastructure leaders like Snowflake and Cloudflare. With election uncertainty removed and business confidence rising, the fund expects the broadening capex cycle to drive performance. They maintain a concentrated portfolio focused on companies benefiting from accelerated computing and the infrastructure required to support next-generation AI systems.
The fund believes we are in the early innings of the next technology cycle amplified by AI, with growth picking up across hardware, data infrastructure, and applications despite macro headwinds.
The fund is optimistic about entering the early innings of the next technology cycle amplified by AI. They expect growth to continue picking up with broadening capex spending, emerging AI applications, and attractive valuations in mid-caps. The tone is confident with a buy any dip strategy.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Dec 23 2024 | 2024 Q3 | ALAB, AMD, ANET, CEG, CRDO, DDOG, GEV, HUBS, MRVL, NET, NVDA, SHOP, SNOW, SPRX, TSLA, VST, ZS | AI, Data centers, energy, growth, semiconductors, technology | TSLA | Spear Alpha navigated 3Q24 macro headwinds while positioning for AI-driven technology cycle acceleration. Fund shifted to offense, expanding beyond core semiconductor holdings into data center infrastructure, networking, and power generation. Growth inflecting across hardware, data infrastructure, and AI applications. Tesla positioned as autonomy play. Concentrated portfolio targeting companies benefiting from broadening AI capex cycle. |
| Jun 30 2024 | 2024 Q1 | AMD, CRWD, FCX, MRVL, NVDA, S, SNOW, TECK, ZS | AI, cybersecurity, Data centers, materials, semiconductors, software, technology |
NVDA FCX CRWD SNOW |
Spear Alpha underperformed in Q1 as rates rose and investors favored mega-caps, but the fund sees early innings of an AI technology cycle. Data center investment is broadening beyond processors while software faces headwinds. The fund expanded into materials and power generation, with Nvidia leading performance. Hyperscaler capex acceleration and Blackwell chip production provide key catalysts ahead. |
| Mar 28 2024 | 2023 Q4 | AMD, CFLT, CRWD, DDOG, MRVL, NET, NVDA, S, SNOW, ZS | AI, Cloud, cybersecurity, Data centers, ETF, growth, semiconductors, technology | - | Spear Alpha ETF returned 88% in 2023 by identifying AI as a breakthrough theme early, with concentrated positions in cybersecurity, AI hardware, and cloud infrastructure leaders like Nvidia, Zscaler, and Snowflake. Enterprise spending has bottomed while AI workloads shift to inference, creating sustainable revenue streams. Despite strong performance, holdings remain significantly below peaks, indicating substantial upside runway ahead. |
| Nov 30 2023 | 2023 Q3 | APLD, ASTS, AVAV, COHR, KLAC, KRMN, LRCX, MKSI, NVDA, WULF | AI, Automation, energy, Industrial, semiconductors, Space, technology | - | Spear Alpha ETF targets companies benefiting from breakthrough industrial technology trends including AI, automation, energy transition, and space exploration. The actively managed fund has delivered 78.45% returns since 2021 inception through concentrated holdings in semiconductors, space technology, and automation companies. SPRX seeks long-term capital growth by identifying durable opportunities in transformative technology value chains. |
| Sep 14 2023 | 2023 Q2 | AMD, AMZN, CFLT, CRWD, GOOG, GOOGL, HUBS, META, MRVL, MSFT, NET, NVDA, S, SHOP, SNOW, SPRX, ZS | AI, Cloud, cybersecurity, Data centers, growth, semiconductors, technology |
^FTSE CFLT |
Spear Alpha ETF delivered 22.3% Q2 returns focusing on AI value chain investments across semiconductors, cloud infrastructure, and cybersecurity. Strong performance driven by Nvidia, AMD, and enterprise software recovery. Manager sees early innings of AI-driven tech cycle with cloud providers ramping $100B+ capex. Holdings remain 50-80% below peaks despite recent gains. |
| Mar 5 2023 | 2023 Q1 | ALAB, ASTS, AVAV, COHR, KLAC, KRMN, LRCX, MKSI, NVDA, WULF | AI, Automation, energy, Industrial, semiconductors, Space, technology | - | Spear Alpha ETF targets breakthrough industrial technology trends through concentrated investments in AI, automation, energy transition, and space exploration. The actively managed fund has delivered 78.45% cumulative returns since 2021 inception, with top holdings in semiconductor leaders and emerging space technology companies. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2024 Q3 |
AIThe fund sees AI as driving the next technology cycle, with applications emerging that were previously impossible due to compute limitations. They are expanding from AI hardware to applications including autonomous driving and quantum computing, noting step-change improvements in performance with accelerated computing. |
Applications Hardware Computing Autonomous Quantum |
Data CentersCapex spending cycle is broadening beyond processors to new data centers and physical infrastructure. Newer powerful systems like Nvidia's Blackwell DGX require new data centers, driving investment in networking and power generation infrastructure. |
Infrastructure Capex Networking Power Hardware | |
Energy TransitionPower generation and the grid have been underinvested for over 20+ years, with the fund expecting a meaningful cycle ahead. They added positions in nuclear power reopening and power generation companies to capitalize on data center energy demands. |
Nuclear Grid Power Infrastructure Generation | |
SemiconductorsHardware upside is broadening from Nvidia to custom chips as Cloud Service Providers enter the space. The fund is managing exposure between processors and custom chip opportunities, with earnings being revised upwards across the semiconductor value chain. |
Custom Processors Cloud Hardware Chips | |
| 2024 Q1 |
AIThe fund believes we are in the early innings of the next technology cycle amplified by AI. AI spending last year was mostly focused on processors/GPUs with Nvidia being the primary beneficiary, but this year the impact is broadening both inside and outside the rack. |
Artificial Intelligence Technology Cycle Processors GPUs Hardware |
Data CentersData center investment cycle is broadening out beyond processors to include networking, memory, electrical and thermal management, and power generation. The fund has expanded exposure further down the data center value chain, specifically to areas outside of the rack including materials, components, and electricity generation. |
Infrastructure Hardware Networking Power Generation Components | |
SemiconductorsNvidia stood out as the best-performing idea in the quarter. AMD and Marvell also outperformed the portfolio but underperformed expectations because while AI is positive, it is not material enough to offset weakness in other business areas. Nvidia's Blackwell chip is entering production and offers significantly lower total cost of ownership. |
Chips Processors GPUs Hardware Technology | |
CybersecurityDespite ransomware hitting all-time highs and affecting over 10% of organizations, cybersecurity got caught up in the software sell-off. Interest rates were the main negative driver while fundamentals remained strong. Crowdstrike was the relative outperformer versus Zscaler and Sentinel One. |
Security Software Ransomware Enterprise Protection | |
CopperFreeport McMoran and Teck Resources outperformed the rest of the portfolio as part of the Materials and Power Generation focus area. Since the end of the quarter, the fund took some profit in copper and redeployed it to other areas in power generation and connectors. |
Materials Mining Commodities Industrial Infrastructure | |
| 2023 Q4 |
AIAI is a core theme and biggest driver behind strong 2023 performance. Strong demand for AI hardware continued throughout the year, with fundamental upside broadening to the rest of the value chain in 4Q23. Several companies now expecting revenue run-rates in the billions directly from AI, including Microsoft and AMD. Workloads are shifting from model training to inference, with inference representing 40% of Nvidia Data Center revenues. |
Artificial Intelligence Hardware Inference Training Workloads |
CybersecurityEnterprise spending caution that commenced in second half of 2022 is coming to an end. Next-gen cybersecurity companies made a push into tangential products such as Cloud and Data security, which are now scaling up and contributing to overall growth. AI is adding an incremental layer of risk, benefiting from major technology shift from changes in enterprise infrastructure. |
Enterprise Zero Trust Endpoint Cloud Security Data Security | |
CloudMajor cloud service providers noted bottoming in fundamentals with incremental AI workloads more than offsetting optimizations. Cloud spending optimizations are now behind us according to hyperscaler commentary. Companies benefiting from massive growth in data and compute/storage requirements. |
Hyperscalers Optimization Data Warehousing Compute Storage | |
Data CentersData Center hardware experiencing an earnings boost from AI. Despite strong 2023 investment in AI, overall server shipments declined year over year and capex growth was muted. Early innings of a meaningful Data Center upgrade cycle with attractive entry points created in 2024. |
Servers Capex Upgrade Cycle Infrastructure Hardware | |
| 2023 Q3 |
AIThe fund invests in companies benefiting from artificial intelligence trends as one of its core secular themes. AI is highlighted as a key breakthrough trend in industrial technology that the fund targets. |
Artificial Intelligence Technology Industrial |
AutomationAutomation and robotics represent a major investment theme for the fund, focusing on companies that benefit from the automation revolution across industrial applications. |
Robotics Industrial Technology Manufacturing | |
Energy TransitionThe fund targets companies benefiting from the energy transition as part of its secular investment themes in breakthrough industrial technology trends. |
Energy Transition Industrial Technology | |
SemiconductorsThe fund has significant exposure to semiconductor companies including KLA Corp, Lam Research, and NVIDIA, representing key holdings in the technology value chain. |
Semiconductors Technology Hardware Manufacturing | |
SpaceSpace exploration is identified as one of the fund's core secular themes, with holdings like AST SpaceMobile representing this investment focus. |
Space Exploration Technology Satellites | |
| 2023 Q2 |
AIAI is a core theme driving strong performance through hardware and software infrastructure opportunities. The fund focuses on uncovering opportunities across the AI value chain including hardware and related software infrastructure rather than just applications. Strong demand for AI hardware continued in Q2 with cloud service providers allocating significant capex to AI. |
Hardware Infrastructure Cloud Capex Value Chain |
SemiconductorsAI hardware/semiconductors was the best-performing sector with Nvidia, AMD, and Marvell delivering strong results. Cloud service providers expanded purchases from GPUs to CPUs and broader networking. The fund maintains large exposure believing they are early in the recovery cycle. |
GPUs CPUs Networking Recovery Cycle | |
Data CentersPositive trends from early-cycle semiconductor manufacturers expanded to broader data center infrastructure. Multiple companies highlighted that cloud spend optimizations are being counterbalanced by new AI workloads. The fund is exploring other investments across the data center value chain. |
Infrastructure Cloud Workloads Value Chain Optimization | |
CybersecurityCybersecurity represents 24.1% of portfolio exposure benefiting from technology shifts in enterprise infrastructure and continuous threat evolution with AI adding incremental risk. The bottoming process has been uneven with companies still experiencing staggered deals and lengthening sales cycles. |
Enterprise Threats Zero Trust Endpoint Risk | |
CloudCloud/Data Infrastructure represents 24.8% of portfolio benefiting from massive growth in data and compute/storage requirements. Several companies noted that cloud optimizations are coming to an end as new workloads offset the impact. |
Data Compute Storage Optimization Workloads | |
| 2023 Q1 |
AIThe fund invests in companies benefiting from artificial intelligence trends as one of its core secular themes. AI is listed as a primary investment focus area for the fund's industrial technology strategy. |
Artificial Intelligence Technology Industrial |
AutomationAutomation and robotics represent a key secular theme for the fund's investment strategy. The fund seeks companies benefiting from automation trends across industrial applications. |
Robotics Industrial Technology | |
Energy TransitionEnergy transition is identified as one of the fund's core secular investment themes, focusing on companies positioned to benefit from the shift toward cleaner energy technologies. |
Clean Energy Transition Technology | |
SpaceSpace exploration represents a key investment theme for the fund, with holdings including AST SpaceMobile as a top position representing 6.43% of net assets. |
Exploration Satellites Technology | |
SemiconductorsThe fund has significant exposure to semiconductor companies with multiple top holdings including NVIDIA, KLA Corp, Lam Research, and Coherent Corp representing substantial portions of the portfolio. |
Chips Technology Hardware |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Sep 14, 2023 | Fund Letters | Spear Advisors | ^FTSE | SentinelOne | Information Technology | Systems Software | Bull | NYSE | AI-Powered Security, cybersecurity, Endpoint Security, Enterprise software, High Growth, Value | Login |
| Sep 14, 2023 | Fund Letters | Spear Advisors | CFLT | Confluent | Information Technology | Application Software | Bull | NASDAQ | AI infrastructure, Apache Kafka, cloud platform, Data Streaming, Enterprise software, real-time data | Login |
| - | Fund Letters | Spear Advisors | TSLA | Tesla Inc | Consumer Discretionary | Automobile Manufacturers | Bull | NASDAQ | AI applications, autonomous driving, Electric Vehicles, Full Autonomy, regulatory support, robotaxi, Technology Transition | Login |
| - | Fund Letters | Spear Advisors | FCX | Freeport-McMoRan Inc. | Materials | Metals & Mining | Bull | NYSE | AI, Copper, Cyclical, data center, infrastructure, materials, Mining, Power generation | Login |
| - | Fund Letters | Spear Advisors | CRWD | CrowdStrike Holdings Inc. | Information Technology | Software | Bull | NASDAQ | AI infrastructure, cloud security, cybersecurity, Enterprise security, Ransomware, SaaS, Software | Login |
| - | Fund Letters | Spear Advisors | NVDA | Nvidia Corporation | Information Technology | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | AI, CapEx, data center, GPUs, Hardware, hyperscaler, semiconductors, technology | Login |
| - | Fund Letters | Spear Advisors | SNOW | Snowflake Inc. | Information Technology | Software | Bear | NYSE | AI applications, Cloud Data, data infrastructure, enterprise spending, growth deceleration, SaaS, Software | Login |
| TICKER | COMMENTARY |
|---|---|
| NVDA | Nvidia (NVDA) outperformed the rest of our portfolio |
| MRVL | Marvell (MRVL) significantly underperformed. We have been adding to our Marvell position |
| AMD | AMD (AMD) significantly underperformed. We cut our exposure to AMD as our research indicated that custom chips are gaining significantly more traction |
| CEG | Constellation Energy (CEG) was the top performer for the quarter post the announcement of a re-opening of the Three Mile Island nuclear plant |
| GEV | we added two relatively new positions in GE Vernova (GEV) |
| VST | we added two relatively new positions in Vistra Energy (VST) |
| ANET | we grew our position in Arista Networks (ANET) |
| ALAB | more recently added new smaller positions in Astera Labs (ALAB) |
| CRDO | more recently added new smaller positions in Credo Technologies (CRDO) |
| SNOW | Our largest investments Snowflake (SNOW) in Data Infrastructure |
| NET | Our largest investments Cloudflare (NET) in Data Infrastructure |
| DDOG | Our largest investments Datadog (DDOG) in Data Infrastructure |
| ZS | and Zscaler (ZS) in Cybersecurity |
| HUBS | In 2024 our exposure to AI Applications was mostly in the productivity improvement area with holdings like Hubspot (HUBS) |
| SHOP | In 2024 our exposure to AI Applications was mostly in the productivity improvement area with holdings like Shopify (SHOP). We have taken some profit here |
| TSLA | Tesla (TSLA) is our top pick here as the company transitions from a cyclical EV play to full autonomy and robo-taxis. We believe that regulatory support in addition to step-change improvement in the safety of the technology will result is significant scale and upside for the stock |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
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