YOLO: 2nd Quarter 2021 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/etfs/yolo.

Commentary

In the 2nd quarter of 2021, the AdvisorShares Pure Cannabis ETF (NYSE: YOLO) declined -10.12% on its net asset value (NAV) and -10.58% on its market price. Year to date, YOLO has gained 24.21% on NAV and 24.16% on market price, outpacing its sister fund MSOS that gets more attention. Even with the negative quarter, it’s been a strange year in 2021 with Canadian cannabis stocks outperforming U.S. stocks as a group, even while most experts are much more bullish on U.S. cannabis prospects. For the full one-year period, July 1, 2020, through June 30, 2021, YOLO gained 109.96% on its NAV and 109.35% on market price.* While those seems like strong returns, cannabis stocks hit a recent high on about February 10, and losses have been frustrating since.

Federal cannabis reform is moving much slower than many investors expected, but cannabis fundamentals (especially in the U.S.) are very strong. I’m expecting better things in the second half of the calendar- driven primarily by U.S. operators.

New Positions:

During the quarter, YOLO didn’t add any new positions. Of course, we’re trimmed some and added to other existing positions opportunistically as we see fit.

Contributors | Detractors:

During the quarter, losers outnumbered winners. Some of the winners were quite small holdings that had little impact. Among significant holdings, second-largest Industrial Properties (NYSE: IIPR) up 6.79%, third-largest Green Thumb Industries (OTC GTBIF – swap) up over 13%, and Tessascend (OTC TRSSF – swap), was up over 15%.

Detractors included top holding Village Farms International (NASDAQ: VFF) down 18%, Canopy Growth (NASDAQ: CGC) down over 24%, and Tilray (NASDAQ: TLRY) over 17%. On the U.S. side, Curaleaf (OTC CURLF – swap) was down almost 7%, Trulieve (OTC TCNNF – swap) down 17%, and Cresco Labs (OTC CRLBF – swap) lost 12%.

Top Holdings

Ticker Security Description Portfolio Weight %
VFF VILLAGE FARMS INTERNATIONAL 15.06%
IIPR INNOVATIVE INDUSTRIAL PROPER 9.83%
GRWG GROWGENERATION CORP 7.00%
GTBIF GREEN THUMB INDUSTRIES SWAP REC 6.70%
TLRY TILRAY INC-CLASS 2 COMMON 6.45%
CGC CANOPY GROWTH CORP 6.30%
CURLF CURALEAF HOLDINGS INC SWAP REC 5.95%
HRVSF HARVESTHEALTH SWAP R 5.30%
CRLBF CRESCO LABS INC SWAP REC 4.89%
TCNNF TRULIEVE CANNABIS SWAP REC 4.77%

As of 06.30.2021. Cash is not included.

Please see our complete Fund holdings at advisorshares.com/etfs/yolo. The holdings details are updated each market day.

Cheers,

Dan Ahrens
AdvisorShares
AdvisorShares Pure Cannabis ETF (YOLO) Portfolio Manager

 

Past Manager Commentary

* Recent Fund performance is attributable to unusually favorable conditions that are likely not sustainable, and such conditions might not continue to exist.


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.

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.