YOLO: 1st Quarter 2022 Portfolio Manager Review
Performance
In the 1st quarter of 2022, AdvisorShares Pure Cannabis ETF (NYSE: YOLO) declined -17.99% on its net asset value (NAV) and -17.40% on its market price. These returns are pretty much in-line for cannabis stocks overall. Since its inception date, YOLO remains among the best-performing cannabis ETFs. It’s bad out there, but we do what we can in an attempt to weather the storm. I would invite investors to compare YOLO’s performance to that of any other cannabis ETFs over equal periods of time.
Portfolio
New Positions
In the first quarter, we added new but relatively small positions in WM Technology, Inc (NASDAQ: MAPS), Leafly Holdings (NASDAQ: LFLY), and Clever Leaves Holdings (NASDAQ: CLVR). We had avoided investing in MAPS for a long time, but now felt good at the recent price.
Winners and Losers
During the quarter, there were only a few positives. Jazz Pharma (NASDAQ: JAZZ) gained 22.19% and Tilray Brands (NASDAQ: TRLY) was up 10.53%. Among smaller holdings, High Tide (NASDAQ: HITI) was up 7.16%, Israeli firm Intercure (NASDAQ: INCR) up 6.78%, and Charlottes Web (TSX: CWEB) up 6.66%.
YOLO’s returns were driven largely by its concentrations in affiliated fund, AdvisorShares Pure US Cannabis ETF (MSOS), which in turn holds large amounts of the biggest U.S. multi-state operators (MSOs). MSOS dropped -18.24% on its net asset value (NAV) in the 1st quarter.
As a reminder, during the last quarter of 2021, we made some significant portfolio changes to YOLO by adding MSOS as the top holding and removing most of the Fund’s individual MSO names at the same time. We feel that it’s a much more efficient way for YOLO to get most of its US cannabis exposure one simple holding. Note – MSOS fees are waived within YOLO’s portfolio so that shareholders do not pay for one ETF to own another.
After being strong bright spots in the Fund in 2021, cannabis-related REITS turned negative this quarter. Innovative Industrial Properties (NYSE: IIPR) returned -21.21% and Power REIT (NYSE American: PW) -42.82%. Other losses in this difficult quarter included GrowGeneration (NASDAQ: GRWG) at -29.43%, Canopy Growth (NASDAQ: CGC) at -13.16% and Village Farms International (NASDAQ: VFF) -17.76%.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| MSOS | ADVISORSHARES PURE US CANN | 34.17% |
| VFF | VILLAGE FARMS INTERNATIONAL | 14.34% |
| IIPR | INNOVATIVE INDUSTRIAL PROPER | 12.86% |
| TLRY | TILRAY BRANDS INC | 5.11% |
| TRSSF | TERRASCEND CORP SWAP REC | 5.00% |
| RIV | RIV CAPITAL INC | 3.91% |
| CGC | CANOPY GROWTH CORP | 3.36% |
| SOLCF | SOL GLOBAL INVESTMENTS CORP SWAP REC | 2.99% |
| GRWG | GROWGENERATION CORP | 2.88% |
| JAZZ | JAZZ PHARMACEUTICALS PLC | 1.76% |
As of 03.31.2022. Cash is not included. Subject to change.
Please see our complete Fund holdings at advisorshares.com/etfs/yolo. The holdings details are updated each market day.
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Past Manager Commentary
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.