Launched last week, the new Defiance Next Gen Altered Experience ETF (PSY) is literally mind-altering.
The ETF started trading just ahead of the Memorial Day weekend. With a focus on psychedelic drugs, the fund invests in companies that helps individuals get their minds right.
“Mental illnesses are on the rise and existing medications have been found wanting,” the Defiance ETFs website said. “A staggering 30% of depression patients do not respond to any currently available treatment.1 Research budgets for psychiatric medicine in large companies have fallen by 70% in 10 years, as confidence wanes that more investment in the same direction will produce improved results.”
“Recent breakthrough studies in the medical repurposing of psychedelics and ketamine have found significant benefits to sufferers of anxiety, PTSD, OCD, eating disorders, depression and others,” the website added. “Declared a ‘breakthrough therapy’, by the FDA in 2018 and 2019, studies on the use of psilocybin have found rapid, marked, and enduring anti-anxiety and depression effects.”
Defiance launched a similar product that trades on the Canadian exchanges. The ETF provider is hoping that an increased interest in thematic funds will help propel PSY in the United States.
“The focus of this is the medical aspect around psychedelics and mental health — we’re seeing a lot of breakthroughs,” said Paul Dellaquila, president of Defiance ETFs. “You’re seeing some of the bigger companies get involved in this type of treatment. Johnson & Johnson has a treatment that is ketamine-based for depression.”
Zeroing In on the Cannabis Industry
PSY’s top holdings home in on the ever-growing cannabis industry. The S&P/MX International Cannabis Index is up 46% the past year, which makes cannabis a good place to start for a new fund.
Recognizable names in the cannabis industry comprise the ETF’s top holdings. Those names include Charlottes Web Holdings, Aurora Cannabis, and Cronos Group.
According to a Bloomberg article, the “market for psychedelic drugs is worth only about $2.8 billion but is growing rapidly and expected to reach $7.6 billion by 2028, according to Data Bridge Market Research.”
“With cannabis becoming more accepted across the U.S., we believe the door is opening wider for alternative drugs, especially as substitutes for opioids,” wrote Eric Balchunas, ETF analyst for Bloomberg Intelligence, in a note.
For more news and information, visit the Smart Beta Channel.