PSIL: 1st Quarter 2024 Portfolio Review
Portfolio
Performance
In the first quarter of 2024, PSIL demonstrated minor positive performance with a net asset value (NAV) increase of +1.27%. PSIL underperformed the S&P 500.
In Q1, the portfolio added a new position in Psyence Biomedical LTD. (PBM) with +271,336 shares. No positions were fully removed from the portfolio during this period, and other trades primarily involved smaller tactical adjustments.
Winners / Losers
Through the 1st quater, top holding Mind Medicine Inc. (MNMD) had an impressive surge of +159.30%, GH Research PLC. (GHRS) gained +83.79%, while ATAI Life Sciences NV. (ATAI) recorded a positive growth of +39.72%.
Conversely, there were some underperformers in this extremely volatile portfolio. Seelos Therapeutics Inc. (SEEL) declined -57.14%, Clearmind Medicine Inc. (CMND) lost -59.08%, and Greenbrook TMS Inc. (GBNHF) was down a total of -65.62% for the quarter.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| MNMD | MIND MEDICINE MINDMED INC | 14.19% |
| CYBN | CYBIN INC | 9.37% |
| CMPS | COMPASS PATHWAYS PLC | 6.15% |
| VTGN | VISTAGEN THERAPEUTICS INC | 5.24% |
| ATAI | ATAI LIFE SCIENCES NV | 4.95% |
| RLMD | RELMADA THERAPEUTICS INC | 4.49% |
| ALKS | ALKERMES PLC | 4.48% |
| GHRS | GH RESEARCH PLC | 4.42% |
| ITCI | INTRA-CELLULAR THERAPIES INC | 4.36% |
| PBM | PSYENCE BIOMEDICAL LTD | 4.26% |
As of 3.31.2024. Cash is not included. Subject to change.
Please see our complete fund holdings at advisorshares.com/etfs/psil. The holdings details are updated each market day.
Psychedelics Landscape
The 2024 legislative season has brought forth proposals for psychedelic legalization in various states, mainly falling into the categories of regulated access and decriminalization. Oregon’s groundbreaking Measure 109 has acted as a model for other states, including California’s Senate Bill 1012, which aims to emulate Oregon’s approach following Gov. Gavin Newsom’s veto of a previous bill. Arizona’s bipartisan-supported Senate Bill 1570 permits non-medical use of psychedelics and prevents health agencies from mandating diagnoses for services. Hawaii’s bill provides certified facilitators with a legal defense, with patients required to grow substances themselves. Maine’s Senate Bill 1914 legalizes personal mushroom cultivation and professional guidance.
On the decriminalization front, New Jersey’s Senate Bill 2283, similar to Colorado’s Proposition 122, focuses on decriminalizing psilocybin and establishing a regulated framework. Connecticut and Rhode Island also have bills addressing psilocybin decriminalization, while Vermont’s Senate Bill 114 seeks to establish a psilocybin advisory group. In California, Zide Door activists aim for a 2026 ballot initiative after failing to gather enough signatures.
Ohio is exploring ibogaine’s potential for treating opioid addiction, led by Bryan Hubbard, following a shift from Kentucky’s initiatives. Research from the Reason Foundation comparing ibogaine to existing treatments guides this exploration.
In Colorado, Proposition 122 has paved the way for a regulated framework for psychedelic-assisted therapy. The Natural Medicine Advisory Board’s draft recommendations, similar to Oregon’s rules with some differences, include permitting psychedelic therapy for mental health. Colorado also proposes training licenses for practical experience and a facilitator license with restrictions on managing certain illnesses. The state allows up to 50% virtual training and additional requirements for consultations and hands-on experience. Ongoing meetings and public input sessions are shaping Colorado’s emerging regulated psychedelics market.
We want to always remind people to think about how they want to invest in the psychedelic space as PSIL is designed to be fully or mostly fully invested. It is not a tactical strategy. If an investor wants to have a more aggressive risk managed approach to investing in this space, they should have a plan/strategy to trade around PSIL. Regardless of the type of investor you are, we appreciate your investment and trading of PSIL as we work to grow the ETF and raise awareness of this industry and its investment opportunities.
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To get updates on the funds, tune in to AdvisorShares’ AlphaNooner Show streaming live each regular weekday starting at 12:00 pm (East Coast time), where I am a guest almost every Tuesday. Other important guests from the psychedelics world often join too. Find it on most major social media platforms or visit our the AdvisorShares “Events” webpage for more information.
Cheers,Past Commentary
Definitions:
The S&P 500 Index is a broad-based, unmanaged measurement of changes in stock market conditions based on the average of 500 widely held common stocks.
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. An investment in the Fund is subject to risk, including the possible loss of principal amount invested.
Psychedelic drugs, also known as hallucinogens, are a group of substances, including psilocybin, that are used to change and enhance sensory perceptions, thought processes, and energy levels. Psychedelic medicines, therapeutics, and healthcare treatments may be used in the treatment of illnesses such as depression, addiction, anxiety and post-traumatic stress disorder. Psychedelic medicine companies include life sciences companies having significant business activities in, or significant exposure to, the psychedelics industry including producers or distributors of psychedelic medicines, biotechnology companies engaged in research and development of psychedelic medicines, and companies that are part of the supply chain for psychedelics.
Psychedelics Companies Risk. Psychedelics companies are subject to various laws and regulations that may differ at the state/local and federal level. These laws and regulations may significantly affect a psychedelics company’s ability to secure financing, impact the market for psychedelics and business sales and services, and set limitations on psychedelics use, production, transportation, and storage. There can be no guarantees that such approvals or administrative actions will happen or be favorable for psychedelics companies, and such actions may be subject to lengthy delays, and may require length and expensive clinical trials. Additionally, therapies containing controlled substances may generate public controversy. Political and social pressures and adverse publicity could lead to delays in approval of, and increased expenses for, companies and any future therapeutic candidates they may develop. All of these factors and others may prevent psychedelics companies from becoming profitable, which may materially affect the value of certain Fund investments. In addition, psychedelics are subject to the risks associated with the biotechnology and pharmaceutical industries.
In Canada, certain psychedelic drugs, including psilocybin, are classified as Schedule III drugs under the Controlled Drugs and Substances Act (“CDSA”) and, as such, medical and recreational use is illegal under Canadian federal laws. In the United States, certain psychedelic drugs, including psilocybin, are classified as Schedule I drugs under the Controlled Substances Act (“CSA”) and the Controlled Substances Import and Export Act (the “CSIEA”) and, as such, medical and recreational use is illegal under the U.S. federal laws. There is no guarantee that psychedelic drugs or psychedelic-inspired drugs will ever be approved as medicines in either jurisdiction.
In the United States, scheduling determinations by the Drug Enforcement Agency (“DEA”) are dependent on Food and Drug Administration (“FDA”) approval of a substance or a specific formulation of a substance. Unless and until psilocybin, psilocin, or other psychedelics-based products receive FDA approval, such products may be prohibited from sale, which could limit the growth opportunities for certain portfolio companies of the Fund. Even if approved by the FDA, the manufacture, importation, exportation, domestic distribution, storage, sale, and legitimate use of such products will continue to be subject to a significant degree of regulation by the DEA.
Security prices of small cap companies may be more volatile than those of larger companies and therefore the Fund’s share price may be more volatile than those of funds that invest a larger percentage of their assets in securities issued by larger-cap companies. These risks are even greater for micro-cap companies.
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 change.
The views in this commentary are those of the portfolio manager and many 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.