A new exchange-traded fund is coming just ahead of 4/20
The YOLO (it stands for You Only Live Once) exchange-traded fund (ETF) is coming and will be here soon. It is officially the AdvisorShares Pure Cannabis ETF and is designed to undercut competitors and make it easy for individuals to invest in marijuana stocks. It is expected to charge 74 basis points – or $7.40 for every $1,000 invested – which is one basis point less than the ETFMG Alternative Harvest ETF.
Bloomberg Intelligence analyst Eric Balchunas states, “Launching 1 basis point cheaper than MJ is a bit absurd, but symbolic of the era we are in right now where expense ratio is one of the first things an adviser looks at. This ETF has at least a fighting chance to find an audience.”
The ETF will be the first in the U.S. to include the word “cannabis” in its name. This is a historic moment, as all previous investment vehicles have shied away from directly referencing marijuana due to the social stigma surrounding the plant. By including cannabis, AdvisorShares is setting a precedent and a new era of cannabis investments is going to follow.
According to a filing with the Securities and Exchange Commission for the ETF, “The Fund is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in securities of companies that derive at least 50% of their net revenue from the marijuana and hemp industry or that are registered with the DEA specifically for the purpose of handling marijuana for lawful research and development of cannabis or cannabinoid-related products and in derivatives or other instruments that have economic characteristics similar to such securities.”
YOLO will be custodied by the Bank of New York Mellon. It will also act as the fund’s administrator and transfer agent, and the ETF is expected to be listed as of tomorrow – two days ahead of “4/20,” the universal term for marijuana.