As reported in Benzinga earlier this week, U.S. cannabis stock investors were treated to a surprise over the 4/20 holiday with the addition of a new ETF option to add to their portfolio. The AdvisorShares Pure Cannabis ETF (NYSE: YOLO) made its debut last Thursday, making it only the second cannabis-related ETF available to investors south of the Canadian border.
For just about a year-and-a-half now, investors looking to diversify their holdings in the cannabis sector have had to go to the ETFMG Alternative Harvest ETF (NYSE:MJ), a dedicated marijuana ETF that holds $1.18 billion in assets under management. While a popular fund, it also holds assets only tangentially connected to cannabis, such as cannabis companies.
To-date for the year. MJ is up 44.5 percent, making it a fund with legs for U.S. investors.
A new kind of ETF for stateside cannabis investors
Unlike MJ, The new fund from AdvisorShares was created as a dedicated cannabis fund. According to Benzinga, YOLO is also actively managed, whereas MJ is passively managed.
Moreover, the new fund’s managers are not necessarily new to the cannabis industry itself. In fact, they also manage the AdvisorShares Vice ETF (NASDAQ:ACT), which has about 25 percent of its assets dedicated to the cannabis industry as well. As per the report in Benzinga, that fund is up 15.56 percent year-to-date.
“The AdvisorShares Pure Cannabis ETF became the first actively managed ETF with a dedicated cannabis investment mandate domiciled in the United States,” notes a statement from the team at AdvisorShares. “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,” the statement continues.
What’s in the box?
YOLO will share some of the same assets as MJ, while also holding some new companies that have yet to make an appearance in an ETF. Due to the ongoing federal prohibition of cannabis, the fund cannot invest in companies based in the United States.
Companies in the fund will include Aurora Cannabis Inc. (NYSE:ACB), Canopy Growth Corp. (NYSE:CGC), Tilray, Inc. (NASDAQ:TLRY), Innovative Industrial Properties (NYSE: IIPR), and Village Farms International, Inc. (NASDAQ: VFF)
At the time of this writing, YOLO is up 2.0 percent, trading at $25.43 per share.