PSIL: 2nd Quarter 2025 Portfolio Review
Portfolio
PERFORMANCE
PSIL delivered a strong second quarter in 2025, climbing +19.31% on a net asset value (NAV) basis and +19.79% in market price. This notable gain outpaced broader equity benchmarks, with the S&P 500 Index advancing 10.94% over the same period, underscoring the resurgence in investor enthusiasm toward the psychedelic therapeutics space..
PORTFOLIO
The fund maintained its active management approach throughout the quarter, although no new positions were introduced. With high volatility in psychedelic securities, the Fund often adds to or trims positions.
These decisions reflect the fund’s focus on optimizing the portfolio in response to both clinical and capital market dynamics
WINNERS / LOSERS
The second quarter featured sharp dispersion in returns among portfolio holdings, a hallmark of this emerging sector. Top performers in Q2 included:
- Quantum BioPharma Ltd. (QNTM): +155.88%
- NRX Pharmaceuticals Inc. (NRXP): +59.03%
- atai Life Sciences (ATAI): +61.03%
On the other end of the spectrum, a few names weighed on performance:
- Incannex Healthcare Inc. (IXHL): -68.12%
- Bright Mind Biosciences Inc. (DRUG): -27.07%
- Vistagen Therapeutics Inc. (VTGN): -20.00%
These figures highlight the inherently high-risk, high-reward profile of the psychedelics space, where investor sentiment is often closely tied to clinical trial milestones, capital access, and regulatory visibility.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| NRXP | NRX PHARMACEUTICALS INC | 8.31% |
| ATAI | ATAI LIFE SCIENCES NV | 8.25% |
| SAGE | SAGE THERAPEUTICS INC | 7.37% |
| QNTM | QUANTUM BIOPHARMA LTD | 7.24% |
| CYBN | CYBIN INC | 7.17% |
| MNMD | MIND MEDICINE MINDMED INC | 6.87% |
| CMPS | COMPASS PATHWAYS PLC | 4.70% |
| NEUP | NEUPHORIA THERAPEUTICS INC | 4.65% |
| ALKS | ALKERMES PLC | 4.61% |
| GHRS | GH RESEARCH PLC | 4.51% |
As of 06.30.2025. Cash is not included. Holdings are 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 psychedelics industry gained renewed momentum in 2025, with global market estimates reaching $6.39 billion, a nearly 15% year-over-year increase driven by the escalating mental health crisis, advancing clinical research, and gradual regulatory progress.1
Investor sentiment improved meaningfully in the second quarter, particularly for well-capitalized biotech leaders like COMPASS Pathways, atai Life Sciences, and GH Research.2 These firms led a resurgence in public market performance and captured the bulk of new capital, while smaller companies continued to focus on consolidation and refining their development pipelines.
U.S. regulatory developments remained a central theme. Although the FDA declined to approve MDMA-assisted therapy from Lykos Therapeutics, the broader federal tone has been more open to alternative regulatory frameworks, keeping hopes alive for emergency use pathways or eventual rescheduling. At the state level, New Mexico authorized a regulated psychedelics market, while Texas approved $50 million in funding for ibogaine research. Other reform efforts slowed but remain active through advocacy and pilot initiatives.3
Outside the U.S., Canada continues to lead in therapeutic access and clinical advancement, Europe is emerging as a research hub, and Latin America is expanding its presence in retreat-based models. Australia leads progress in the Asia-Pacific region through clinical trials.
Key investment themes include the growing body of research into psychedelics for depression, PTSD, and addiction, a favorable shift in public sentiment, and the increasing influence of younger, mental health focused demographics. However, the sector continues to face challenges such as regulatory fragmentation, limited late-stage trial data, and lingering stigma.
While risks remain, particularly around federal law and institutional hesitancy, the second quarter of 2025 signaled accelerating traction for the sector. With continued progress in clinical validation and policy evolution, we believe psychedelics remain a high-potential, long-term opportunity for investors focused on innovation in behavioral health.
1 OpenPR. The Business Research Company. Psychedelic Drugs Global Market Report 2025: Soaring Market Growth – $6.39 Billion by 2025 and $11.93 Billion by 2029. February 1, 2025
2 Psychedelic Alpha. Psychedelic funding Update: Q2 2025. July 9, 2025.
3 Reason Foundation. Ferenstein, Gregory. State psychedelics legalization and policy roundup – June 2025. June 16, 2025.
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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.