Get Ready for a New Cannabis and Marijuana Targeted ETF

April 16, 2019 by Jon C. Ogg

Source: Dmitry_Tishchenko / Getty Images
The quest for investing into the trend of legalized marijuana is about to get another player. AdvisorShares is launching an exchange-traded fund called the AdvisorShares Pure Cannabis ETF. The launch date is to begin trading on Thursday, April 18, 2019, under the YOLO stock ticker. The fund also has an experienced portfolio manager who may have more targeted expertise in this field based on prior management history.

According to AdvisorShares, this will be the first U.S.-listed actively managed ETF with a dedicated and fully invested exposure into the cannabis industry. Does the YOLO ticker of “you only live once” seem appropriate?

The ETF will invest in domestic companies associated with cannabis, as well as foreign cannabis companies with public equity securities. It is also being called an active ETF which will allocate its funds across a universe of primarily U.S. and Canadian cannabis companies. The target is legal businesses, and it will include companies which specialize in the consumer products segment within cannabis.

Dan Ahrens, managing director of AdvisorShares, and who is the portfolio manager for the YOLO ETF. He is the manager who launched the Vice Fund (VICEX) and is portfolio manager of the AdvisorShares Vice ETF (NASDAQ: ACT). He said of this upcoming launch:

We feel cannabis stands poised to become a market disruptor and long-term emerging growth opportunity, especially as societal, business and regulatory landscapes evolve. We believe YOLO may provide a compelling case to investors seeking emerging growth and dedicated cannabis exposure for their portfolios.

A video presentation making the case for YOLO by Dan Ahrens was also available. The target industries are in cultivation and agriculture, biotech and pharma, medical, real estate, retail, or finance.

The AdvisorShares fund sheet also said of the industry:

The portfolio manager believes today’s new era can be viewed in similar regard to post-Prohibition, commencing a growing acknowledgement and understanding of cannabis and its uses among a mainstream audience. The industries that comprise the multi-billion dollar cannabis universe represent a new frontier, where proper caution and due diligence must be exercised surrounding its regulations and risks, in seeking attractive long-term cannabis investment opportunities.

YOLO will have a net expense ratio of 0.74%, made up of a 0.60% management fee and 0.14% in other expenses.

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