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YOLO: May 2019 Portfolio Manager Review

Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. Returns less than one year are not annualized. For the fund’s most recent standardized and month-end performance, please click www.advisorshares.com/fund/yolo.

Commentary

Since its launch on April 18 of this year, AdvisorShares Pure Cannabis ETF (NYSE Arca: YOLO) has continued to grow assets under management. It launched with $2.5 million in assets, had more than $36 million at the end of April, and grew to $55 in total assets at the end of May. We expect it to keep growing larger, of course. YOLO is growing in assets, even while marijuana stocks, as a whole, were negative in May. YOLO returned -10.28% on a market price basis and -10.46% its net asset basis. The S&P 500 Index dropped -6.35%.

Anyone reading this commentary should know that there are very few competitor cannabis or marijuana funds in existence. There’s one large ETF listed in the U.S. and another large ETF listed in Canada, along with a few much smaller Canadian funds. YOLO has outperformed those funds’ performance (and the indexes they are based on) in both the month of May and since our launch date 4/18/2018. We think we can do better using active management, thoughtful security selection and good trading techniques. Volatile cannabis stocks can create opportunities to buy low and sell high. 

In addition to the performance in this short period of time since launch, it’s important to understand the differences between YOLO and other funds that may be available. YOLO is really the first ETF of its kind – focusing on cannabis, but with full regulatory approval, actively-managed, U.S. domiciled and listed, and with a real U.S. Federal bank acting as custodian.

AdvisorShares Pure Cannabis ETF, as the name implies, is about investing in pure cannabis exposure. We own growers, distributors, real estate companies, biotech and pharma – marijuana that’s recreational or medical. In this Fund, we aren’t investing in big tobacco, big alcohol suppliers, accessories or other things that are just somewhat “related” to cannabis. We also aren’t investing in pesticide companies or) “big pharma” companies that may only have small amounts of their revenue or resources tied to cannabis

With the huge future potential of cannabis, we realize this is a very new and rapidly changing investment area. We feel strongly that active management is extremely important. Some companies will be very successful. A great many will not be. Stock selection and careful portfolio management are imperative.

Top Holdings

Top 10 Holdings Portfolio Weight May Return
ORGANIGRAM HOLDINGS INC 8.21% -2.82%
INNOVATIVE INDUSTRIAL PROPERTIES 7.24% -1.30%
APHRIA INC 7.04% -13.06%
CANNTRUST HOLDINGS INC 6.32% -23.04%
GREEN ORGANIC DUTCHMAN  5.31% -22.04%
VILLAGE FARMS INTERNATIONAL 5.27% -1.63%
HEXO CORP 5.14% -17.37%
CARA THERAPEUTICS INC 4.79% 7.76%
CANOPY GROWTH CORP 4.51% -19.89%
NEPTUNE WELLNESS SOLUTIONS 4.38% 1.69%

As of 05.31.2019.

 

Cheers,

Dan Ahrens
AdvisorShares Pure Cannabis ETF (YOLO) Portfolio Manager

 

Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting www.advisorshares.com. Please read the prospectus carefully before you invest. Foreside Fund Services, LLC, distributor.

There is no guarantee that the Fund will achieve its investment objective.The Fund is subject to a number of risks that may affect the value of its shares. This section provides additional information about the Fund’s principal risks. The degree to which a risk applies to the Fund varies according to its investment allocation. Each investor should review the complete description of the principal risks before investing in the Fund. As with investing in other securities whose prices increase and decrease in market value, you may lose money by investing in the Fund.

Cannabis-Related Company Risk. Cannabis-related companies are subject to various laws and regulations that may differ at the state/local and federal level. These laws and regulations may (i) significantly affect a cannabis-related company’s ability to secure financing, (ii) impact the market for marijuana industry sales and services, and (iii) set limitations on marijuana use, production, transportation, and storage. Cannabis-related companies may also be required to secure permits and authorizations from government agencies to cultivate or research marijuana. In addition, cannabis-related companies are subject to the risks associated with the greater agricultural industry, including changes to or trends that affect commodity prices, labor costs, weather conditions, and laws and regulations related to environmental protection, health and safety. Cannabis-related companies may also be subject to risks associated with the biotechnology and pharmaceutical industries. These risks include increased government regulation, the use and enforcement of intellectual property rights and patents, technological change and obsolescence, product liability lawsuits, and the risk that research and development may not necessarily lead to commercially successful products.​

Shares are bought and sold at market price (closing price) not NAV and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined), and do not represent the return you would receive if you traded at other times.

Holdings and allocations are subject to risks and to change.

The views in this commentary are those of the portfolio manager and may not reflect his views on the date this material is distributed or any time thereafter. These views are intended to assist shareholders in understanding their investments and do not constitute investment advice.