Whiskey A Go Go: Make A Toast With This New ETF
For investors wondering if a sin stocks exchange-traded fund would ever be reborn, the next best thing may have come to town Wednesday with the debut of the Spirited Funds/ETFMG Whiskey and Spirits ETF (NYSE: WSKY).
WSKY tracks the the Spirited Funds/ETFMG Whiskey & Spirits Index, an index that isn't limited to whiskey producers. Indeed, the Spirited Funds/ETFMG Whiskey & Spirits Index does hold whiskey-related fare, but it's also home to spirit distilleries, breweries, and vintners as well luxury goods makers.
“The universe of applicable companies are broken down into so-called Core and Non-Core holdings where Core components include those that operate a whiskey distillery and are primarily engaged in the production of whiskey or spirits, whereas Non-Core components are companies not categorized as Core companies but are involved in luxury goods and sale of spirits or mixers. If the underlying index’s aggregate weight of Core companies fall below 85%, additionally components are taken from Non-Core companies based on market capitalization,” according to ETF Trends.
Fundamentally speaking, WSKY could prove to be a well-timed new ETF.
“A thirst for bourbon, Tennessee whiskey, and rye whiskey at home and abroad helped to boost the overall supplier sales for spirits up 4.1%, said the Distilled Spirits Council in a statement. American whiskeys outpaced the industry with a 7.8% growth from the previous year to revenues of $2.9 billion,” according to Fortune.
Vodka is the only spirit that outsells whiskey in the US.
“We believe we’re at year 5 of a 25-40 year supercycle that could see continued growth in consumer demand for whiskey and spirits, much like what has occurred with craft breweries over the past two decades,” David Bolton, President and CEO at Spirited Funds, said in a press release.
Diageo Plc (NYSE: DEO) is by far WSKY's largest holding with a weight of 23.1 percent. The new ETF charges 0.75 percent per year, or $75 on a $10,000 investment.
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