+ 1.40
+ 0.78%

YOLO? US Investors Are Getting Another Cannabis ETF

April 17, 2019 12:02 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More

U.S. investors craving cannabis exposure via the exchange traded funds have, since late 2017, one choice: the ETFMG Alternative Harvest ETF (NYSE:MJ).

Another choice in the U.S.-listed cannabis ETF space is coming Thursday, April 18, with the debut of the AdvisorShares Pure Cannabis ETF (NYSE:YOLO).

What To Know

AdvisorShares' efforts to launch YOLO were highlighted in a Securities and Exchange Commission filing out earlier this year.

“The Fund is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in securities of companies that derive at least 50% of their net revenue from the marijuana and hemp industry or that are registered with the DEA specifically for the purpose of handling marijuana for lawful research and development of cannabis or cannabinoid-related products and in derivatives or other instruments that have economic characteristics similar to such securities,” according to the SEC filing.

Why It's Important

YOLO will be the first actively managed cannabis ETF to trade in the U.S. Maryland-based AdvisorShares also sponsors the AdvisorShares Vice ETF (NASDAQ:ACT), which is also actively managed and can allocate about a quarter of its weight to cannabis equities. Dan Ahrens, ACT's portfolio manager, will also serve as YOLO's portfolio manager.

YOLO “allocates across a universe of primarily U.S. and Canadian cannabis companies engaging in legal business which span different industries, including those specializing in consumer products,” according to AdvisorShares.

YOLO will typically hold less than 40 U.S. and Canadian mid- and small-cap cannabis companies. The fund will also be the first U.S.-listed ETF to have the word “cannabis” in its title.

What's Next

The aforementioned MJ ETF has over $1.2 billion in assets under management and U.S. investors have been clamoring for more cannabis ETFs. YOLO could benefit from that demand and the new AdvisorShares ETF has an advantage, albeit modest, over the established MJ.

YOLO will charge 0.74 percent per year, or $74 on a $10,000 investment, an annual fee that is one basis point lower than the 0.75 percent charged by MJ.

Related Links

Canada Gets A Unique Cannabis ETF

Sink Into This Saudi Arabia ETF

Related Articles

US Election Could Have 'Positive Collateral Benefits' For Canadian Cannabis Stocks

Cannabis stocks got off to a hit start to the week following a CNBC story published over the weekend suggesting that a Joe Biden victory in the November election could open the door for the decriminalization of adult-use marijuana, potential rescheduling and other federal cannabis l read more

The Week In Cannabis: Aphria Earnings, Canopy's Distribution Deal, And A Big Conference

This was an exciting week for the cannabis industry, marked by the ninth edition of the Benzinga Cannabis Capital Conference. Benzinga’s last big cannabis event of 2020 took place virtually, featuring almost 100 speakers from all around the world. Read some of the key takeaways: read more

Mexico's Cannabis Legalization Addresses Several National Woes, Creates Opportunity

After several extended deadline extensions, Mexican lawmakers seem on course to legalize adult-use cannabis in the coming weeks. read more

Cannabis Analyst Talks Canadian Price Deflation, Names Aphria Top Stock Pick

The growth thesis for Canadian cannabis stocks certainly hasn’t played out the way investors had hoped in 2020. One of the biggest headwinds legal producers have faced this year is extreme price deflation in the Canadian market. Flower Prices Falling: Canadian flower prices are down 33% since mid-2019, according to Cantor Fitzgerald analyst Pablo Zuanic. read more

Analyst Previews Cannabis Earnings: Green Thumb Positioned To Beat By Hefty Margin

Cannabis stocks have been on fire since Kamala Harris said Democratic presidential candidate Joe Bid read more