Do you think that people will indulge in their vices regardless of the economy? Sure bet? Well, now you can put your money where your mouth is. AdvisorShares announced that the AdvisorShares Vice ETF (Ticker: ACT) the first exchange-traded fund focused on alcohol, tobacco, and cannabis will began trading today (12.12).
“We’re pleased to leverage a unique area of our investment expertise and deliver a fully-transparent Vice ETF never before seen in the marketplace,” said Dan Ahrens, managing director of AdvisorShares and portfolio manager of ACT. “Alcohol and tobacco possess among the highest profits margins of consumer products, and are among the equity market’s best dividend payers which we feel will help enhance the total return of ACT. We believe cannabis-related equities – which span across multiple industries – maintain an enormous upside as both society and regulations continue to evolve.”
So, what does this mean for those who don’t speak Wall Street? Basically, Vice ETF will allow investors to put their cash into a special fund invested across several different companies in the alcohol, cannabis, and tobacco industries. Specifically, an ETF is like a mutual fund, but more honed in on one index, trading during the day, lacking investment minimums, and offering some better tax benefits. If you want to dig deeper, Investopedia has a detailed explanation.
The finance guys at AdvisorShares note that, historically, many market watchers have labeled vice companies as recession-resistant areas of investment. “People historically spend on – and take pleasure in – their leisure, habits and vices during both flourishing and challenging economic times,” explained a press release.
Vice ETF will be the first, passively or actively managed, fund to specialize in this market. However, it is not the first investment for AdvisorShares. The group touts 16 active ETFs with $1.1 billion of assets under management (as of December 1, 2017).
For more information about the fund, click here. But, please remember that all investing carries risk, gain is never guaranteed (otherwise, we all just feed our earnings into a magic money machine).