YOLO: 4th Quarter 2023 Portfolio Review
Performance
Based on net asset value (NAV), YOLO was down 10.81% for the 4th quarter of 2023.
Portfolio
The portfolio welcomed a new addition with the inclusion of Ispire Technology Inc. (ISPR), comprising 79,858 shares. During this period, no positions were removed from the portfolio. Instead, we maintained our proactive approach by continuously adjusting weightings to effectively manage the overall portfolio.
Winners and Losers
During the quarter, Innovative Industrial Properties (IIPR) showed significant growth, with an increase of 35.73%, while Ispire Technology Inc. (ISPR) also demonstrated positive performance, recording a gain of 32.28%. On the downside, IM Cannabis Corp. (IMCC) experienced a decline of 45.50%, and Power REIT (PW) was down 45.86%.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
As of 12.312023. 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.
International Cannabis Landscape
International cannabis companies have experienced an increase in their activities, as the US Senate Banking Committee gave approval to a bipartisan marijuana banking bill, the SAFER Banking Act, and the release of a letter from the Department of Health and Human Services (HHS) recommending the “rescheduling” of cannabis by the Drug Enforcement Agency (DEA).
While international investment opportunities are limited, but growing, some of the highlights for 2023 include:
- Germany has taken significant steps towards potentially becoming the EU’s largest economy to legalize marijuana for adults. However, the final vote on the proposal has been postponed, and it is now expected to take place in early 2024.
- In 2023, Colombian lawmakers achieved significant strides in the direction of legalizing marijuana, progressing legislation through the country’s Chamber of Representatives and a Senate committee. However, in December, despite supporters urging urgent Senate consideration of the bill, the full chamber decided to set aside the proposal during its fourth debate, one of eight required to adopt the constitutional amendment. This setback implies that advocates will need to initiate the two-year process anew in 2024.
- As the year concluded, lawmakers in Ukraine approved a bill to legalize medical marijuana on a national level, paving the way for it to be signed into law by President Volodymyr Zelensky
- In 2021, Malta, the smallest country in the European Union, made history by becoming the first on the continent to legalize marijuana. This year, the nation further advanced the implementation of this reform by becoming the first to issue licenses for nonprofit “cannabis associations,” allowing them to commence the cultivation of the plant.
- In December, organizers in Italy initiated the circulation of a petition for a cannabis-only measure. This proposed measure aims to permit the home cultivation of four plants, establish social clubs over time, and eliminate penalties for consumers—aligning with approaches seen in Malta and the German proposal.
- Luxembourg achieved a milestone last summer by becoming the second European Union country, following Malta, to legalize the possession and cultivation of marijuana. Lawmakers successfully passed the legalization law in June, and it came into effect the following month.
- Switzerland took a tentative step into cannabis legalization this year by introducing a regulated sales pilot program. This initiative is limited to a select number of participants and operates in a few specific locations.
- In mid-December, the Netherlands marked a significant milestone as two cities, Breda and Tilburg, commenced the sale of the nation’s first legally cultivated cannabis.
- The Albanian Parliament has legalized cannabis for medical purposes in July.
We want to always remind people to think about how they want to invest in the space as YOLO is designed to be fully or mostly fully invested. It’s not a fully tactical strategy. So if you want to have a more aggressive risk managed approach to investing in this space, you will want to have a plan/strategy to trade around YOLO. Regardless of the type of investor you are, we appreciate your investment and trading of YOLO as we work to grow the ETF and continue to raise awareness around the cannabis industry and its investment opportunities.
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Cheers,Past 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.