AdvisorShares, an exchange traded fund provider known for its actively managed investment options, has launched a new ETF that capitalizes on vice and also one among the first to include targeted exposure to the marijuana industry.
On Wednesday, AdvisorShares rolled out the actively managed AdvisorShares Vice ETF (NasdaqGM: ACT), which has a 0.75% expense ratio.
The fund will be managed by Dan Ahrens, managing director and chief operating officer of AdvisorShares, and Rob Parker, the director of capital markets for AdvisorShares.
ACT will try to generate long-term capital appreciation by companies that derive at least 50% of their net revenue from tobacco and alcoholic beverages and companies that derive at least 50% of their net revenue from the marijuana and hemp industry or have at least 50% of their company assets dedicated to lawful research and development of cannabis or cannabinoid-related products, according to a prospectus sheet.
Specifically, the active ETF will hold at least 25% of its investments in the food, beverage & tobacco industry within the consumer staples sector. In addition, the fund will include exposure to marijuana and hemp industry, and cannabis or cannabinoid-related products, along with companies that may have current or future revenues from cannabis-related business.
Cannabis stocks covers a wide variety of industries including agriculture, biotechnology, pharmaceutical, real estate, retail, and finance. Those engaged in cannabis-related business include companies that conduct medical research, produce drug products, manufacture hemp products, or engage in agricultural activities, real estate activities, or financial services activities.
“Alcohol and tobacco provide a long, established history of delivering all-weather, predictable returns in the equity markets. The emergence of cannabis-related companies and their significant growth potential adds a compelling element to an investment theme particularly resistant to market drawdowns and recessionary environments,” according to AdvisorShares.
Furthermore, alcohol and tobacco companies are among the equity market’s best dividend payers, showing a long history of consistent growth and rising dividends that can enhance a long-term portfolio and meet income-minded investors’ needs.
For more information on new fund products, visit our new ETFs category.