The AdvisorShares Pure Cannabis ETF (Ticker: YOLO) began trading on Thursday, which makes it the first active exchange-traded fund (ETF) domiciled in the United States to deliver dedicated, fully-invested cannabis exposure.
Because of its active management component, YOLO can perform the necessary adjustments to its portfolio in quicker order versus a passive index-based strategy. According to AdvisorShares, this is of particular benefit given that the cannabis marketplace rapidly evolves, which can make way for a number of market fluctuations that can occur with investing in this niche space.
YOLO seeks long-term capital appreciation by investing in both domestic and foreign cannabis equity securities. This active ETF 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. YOLO’s portfolio management team carries deep experience in the capital markets and a well-established expertise of investing in highly-regulated areas of the markets including cannabis.
“We feel cannabis stands poised to become a market disruptor and long-term emerging growth opportunity, especially as societal, business and regulatory landscapes evolve,” said Dan Ahrens, managing director of AdvisorShares and portfolio manager of YOLO. “We believe YOLO may provide a compelling case to investors seeking emerging growth and dedicated cannabis exposure for their portfolios.”
Per the AdvisorShares site, the fund will provide prospective investors with:
- Long-Term Upside Potential: the emergence of select cannabis securities and their long-term growth potential adds a compelling element for investors seeking pure cannabis exposure and a potential high-growth complement to a broad-based equity allocation.
- First Active ETF with Dedicated Cannabis Exposure: the first actively managed ETF with dedicated cannabis exposure available in the U.S., which carries inherent advantages.
- Experienced Portfolio Management Team – YOLO’s portfolio management team carries deep experience in the capital markets and a well-established expertise of investing in highly-regulated areas in the equity markets including cannabis.
The announcement comes as another marijuana ETF, ETFMG Alternative Harvest ETF (NYSEArca: MJ), is having a stellar year thus far with a 46.30 year-to-date gain. One of its top three holdings, Canopy Growth, recently announced on Thursday that it was acquiring cannabis cultivation company Acreage Holdings in a $3.4 billion deal.