There has been tremendous development of the marijuana industry over the past few years, and 2018 in particular was groundbreaking for cannabis-related businesses, as several marijuana ETFs have sprouted, including the AdvisorShares Pure Cannabis ETF (YOLO).
The AdvisorShares Pure Cannabis ETF became the first actively managed ETF with a dedicated cannabis investment mandate domiciled in the United States. The AdvisorShares Pure Cannabis ETF, or YOLO, seeks long-term capital appreciation by investing in both domestic and foreign cannabis equity securities. YOLO is designed to fully-invest for pure cannabis exposure under the guidance of a deeply experienced portfolio management team navigating the emerging cannabis marketplace.
Cannabis and its various applications have been used throughout human civilization for over 5,000 years. As society, business and regulatory landscapes evolve in the 21st century, the upside potential of cannabis as an emerging investment avenue has arrived.
Yolo’s portfolio manager believes that today’s new era can be viewed as akin to post-Prohibition, initiating a growing acknowledgement and understanding of cannabis and its uses among a mainstream audience. The industries that constitute 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 ETF Competitors
According to Bloomberg, YOLO, which stands for the credo, “You Only Live Once”, is the ticker for the AdvisorShares Pure Cannabis ETF, which charges 74 basis points, or $7.40 for every $1,000 invested. That’s 1 basis point less than the ETFMG Alternative Harvest ETF, creatively named known as MJ., and the AdvisorShares Vice ETF (ACT), two other popular marijuana ETFs.
YOLO cannot invest in U.S.-based companies unless those companies businesses are legal at the federal level. Even with the many regulatory barriers faced by potential issuers of cannabis ETFs, MJ’s success indicates there is appetite for these products, and YOLO aims to capitalize on that boom.
Underscoring the point that there is appetite among U.S. ETF investors for more marijuana funds, YOLO is almost a month old and has nearly $48 million in assets under management, according to issuer data. Investors have added $13.74 million to YOLO this month.
YOLO will typically hold up 40 stocks and focus and mid- and small-cap cannabis companies. The pot fund holds shares of some companies found in MJ, including Aurora Cannabis Inc. ACB 0.52%, Canopy Growth Corp. CGC 2.22% and Tilray, Inc. TLRY 5.25%.
YOLO holdings such as Innovative Industrial Properties IIPR 2.22% and Village Farms International, Inc. VFF 2.27% are making their first appearances in a marijuana ETF.
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