New Gerber ETF Invests in Tech and ‘Things That Were Illegal’

(Bloomberg) -- A new exchange-traded fund from Ross Gerber is all-in on the once-unsavory parts of society.

The AdvisorShares Gerber Kawasaki ETF (ticker GK) is an actively managed fund helmed by the Gerber Kawasaki co-founder himself. While concerns over concentration risks have haunted active ETFs this year, GK will “seek to limit positions to the firm's top investment ideas,” according to a press release announcing the fund, which began trading Friday.

The ETF is designed to incorporate an array of different themes, including what Gerber calls “things that used to be illegal,” namely cannabis and online gambling companies. Among GK's top holdings are the AdvisorShares Pure US Cannabis ETF (ticker MSOS) and MGM Resorts International, a proxy for Internet betting, Gerber said. Investing on the fringes of permittable U.S. industries packs the potential for outsized growth should the regulatory landscape shift, according to Gerber.

“We expect federal legalization any time soon and that's going to be a huge catalyst for cannabis companies that have ridiculous and onerous costs and taxes that other businesses don't have,” Gerber said on Bloomberg's “QuickTake Stock” streaming program Tuesday. “Vegas had an amazing weekend this weekend, but when you add in the online component and the amount of money that can be made through gambling online, these companies involved in online gambling are very, very attractive to us.”

GK holds 44 securities in total, the bulk of which are concentrated in the consumer discretionary and technology sectors. Beyond MSOS and MGM, other top holdings include the Global X Lithium & Battery Tech ETF (ticker LIT), Tesla Inc. and NVIDIA Corp, according to data compiled by Bloomberg.

Shares in the ETF have dropped about 1% in its first two days of trading, while the tech-heavy Nasdaq 100 has climbed 1.5% over that period.

GK's debut creates another avenue for Gerber Kawasaki to potentially ride the retail boom that's unfolded over the past year. The Santa Monica, California-based firm's assets have grown to $2 billion across 8,000 clients -- up from $1.6 billion at the start of 2021 -- with between 10 to 20 new clients added a day, according to Gerber.

“Young people are investing like we haven't seen since the 90's, when I started in the industry,” Gerber said. “We're super excited.”

©2021 Bloomberg L.P.