Actively Managed Psychedelics ETF Expected to Launch Soon

Investors may soon be able to access a basket of psychedelic stocks via a third ETF which appears set to launch on the NYSE Arca under ticker symbol PSIL. Advisorshares, a provider of actively managed ETFs, filed a preliminary prospectus for the Advisorshares Plant Medicine ETF, which would primarily invest in psychedelics companies. 

Importantly, this ETF is actively managed, as opposed to PSY and PSYK which seek to replicate the performance of a passive index of securities (usually achieved by weighting according to marketcap or some other objective metric). 

The remit for this active management (which is, in practice, the acquisition and disposal of positions in psychedelics companies) is rather broad, with the methods of selecting companies explained as follows:

The Advisor may use a variety of methods for security selection. As the Fund primarily focuses on certain industries, the Advisor intends to select companies with dominant positions in their respective markets, or those in unique positions for growth and expansion. The Advisor will utilize numerous outside analyst ratings and stock selection rating tools. In addition, the Advisor may invest the Fund’s assets in lesser-known companies that the Advisor believes have a unique opportunity for growth. At times, the Advisor may aim to buy certain out-of-favor stocks believed to be at prices below their future potential value, as measured by the Advisor or outside analysts. The Fund may sell a security when the Advisor believes that the security is overvalued or better investment opportunities are available, or to limit position size within the Fund’s portfolio.

Advisorshares provides a number of thematic ETFs in emergent sectors, with PSIL representing its latest potential addition.

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and more…