PSIL: 4th Quarter 2024 Portfolio Review
Portfolio
PERFORMANCE
PSIL delivered a dramatic turnaround in the fourth quarter of 2024, surging 46.55% (NAV) | 44.52% (market), far outpacing the S&P 500’s 2.41% gain during the same period. Despite this strong finish, the fund ended the year down -19.44% (NAV) | -20.11% (market), reflecting the high volatility and speculative nature of the psychedelics sector.
PORTFOLIO
In Q4, PSIL initiated a new position in Neurocrine Biosciences Inc. (NBIX) with 2,030 shares, while making tactical adjustments, including a reduction in Bright Mind Biosciences Inc. (DRUG). No positions were fully exited during the quarter.
On December 10, 2024, Neuronetics (STIM) completed its acquisition of Greenbrook TMS Inc. (GBNHF). This merger is expected to expand patient access to mental health treatments by integrating Neuronetics’ cutting-edge technology with Greenbrook’s established treatment center network.
WINNERS / LOSERS
The quarter saw extraordinary gains from Bright Mind Biosciences Inc. (DRUG), skyrocketing 3,197% following groundbreaking Phase 2 trial results for its drug-resistant epilepsy treatment. NRX Pharmaceuticals Inc. (NRXP) also posted solid gains, rising 30.18%.
On the downside, Relmada Therapeutics Inc. (RLMD) plummeted 83.95%, while Compass Pathways (CMPS) declined 40.00%, underscoring the sector’s volatility.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| MNMD | MIND MEDICINE MINDMED INC | 11.43% |
| NRXP | NRX PHARMACEUTICALS INC | 10.81% |
| CYBN | CYBIN INC | 7.08% |
| ATAI | ATAI LIFE SCIENCES NV | 6.56% |
| ALKS | ALKERMES PLC | 6.00% |
| IXHL | INCANNEX HEALTHCARE INC | 5.56% |
| VTGN | VISTAGEN THERAPEUTICS INC | 4.66% |
| NBIX | NEUROCRINE BIOSCIENCES INC | 4.39% |
| ITCI | INTRA-CELLULAR THERAPIES INC | 4.32% |
| SAGE | SAGE THERAPEUTICS INC | 4.11% |
As of 12.31.2024. Cash is not included. Holdings subject to change.
Please see our complete fund holdings at advisorshares.com/etfs/psil. The holdings details are updated each market day.
Psychedelics Landscape
Q4 brought a mix of breakthroughs and setbacks for the psychedelics industry. The landmark success of Bright Mind Biosciences’ epilepsy study showcased the immense potential of psychedelic-based treatments. However, efforts to legalize psychedelics in Massachusetts failed at the ballot box, highlighting the regulatory hurdles that still lie ahead.
Despite this, momentum continues to build. As of January 2025, at least 13 states—including New York, Virginia, Missouri, Illinois, Colorado, and Washington—introduced psychedelic-related legislation, signaling increasing political interest in reform.
The industry’s long-term outlook remains promising. The FDA has already granted breakthrough therapy designations for psilocybin, MDMA, and LSD, paving the way for further clinical advancements. The regulatory landscape could shift even further under Robert F. Kennedy Jr., Trump’s nominee for Secretary of Health and Human Services, who has been openly critical of the FDA’s stance on alternative mental health treatments, including psychedelics.
While some advocates look to the cannabis industry as a model, psychedelics require a distinct regulatory framework due to their unique therapeutic applications and the necessity of guided psychotherapy. States like Oregon and Colorado are pioneering this approach, emphasizing structured, supervised use rather than broad commercialization. As more states explore reform, establishing rigorous safety, accessibility, and oversight measures will be crucial in shaping a sustainable and responsible industry.
The psychedelics sector stands at a crossroads, balancing regulatory challenges with groundbreaking scientific progress. As state-level reforms expand and clinical research advances, 2025 could be a pivotal year for the industry. By learning from past drug policy reforms while carving its own regulatory path, the psychedelics market has the opportunity to redefine mental health treatment and set new standards for safe, effective, and transformative therapies.
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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 or summary 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.