Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

What Lies Ahead For Vice ETFs?

By Zacks Investment ResearchStock MarketsApr 23, 2018 05:36AM ET
www.investing.com/analysis/what-lies-ahead-for-vice-etfs-200308057
What Lies Ahead For Vice ETFs?
By Zacks Investment Research   |  Apr 23, 2018 05:36AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Vice ETFs primarily target companies dealing in products seen as vices, such as alcohol, tobacco or marijuana. These ETFs are attractive options for those seeking some diversification in their portfolio by investing in the so-called sin stocks.

The need to form such a category was primarily because of some investors’ inclination toward sustainable investing, which mainly seeks to avoid sin stocks. However, some investors choose such stocks for their attractive return potential.

How to Add Sin Stocks to Your Portfolio?

Investors have multiple ways to gain exposure to the space. Depending on their preference, investors can choose pure play alcohol stocks, tobacco, marijuana stocks or form a diversified portfolio of the entire space. However, owing to high volatility in this space and stringent regulations, it is advisable to go the ETF way to gain exposure to the sector.

With experienced managers handling money, investors will be in a good spot when the sector performs well. When AdvisorShares Vice ETF was launched last September, the fund’s portfolio manager Dan Ahrens said, “We’re not making any kind of moral judgment or statement about what people want to consume with this focus; there’s a strong economic argument for looking at these sectors."

Another positive for this segment’s investors is that these products are somewhat staples. Even when the economy is not performing well, people drink and smoke. As a result, even if the sector takes a beating at the time of a recession, it will outperform other segments of the markets, owing to its demand interdependency.

The alcohol industry has been looking up, with growth surpassing expectations. Volumes for spirits grew 2.6% last year, according to data provided by the Distilled Spirits Council, while supplier revenue was up 4.0% to $26.2 billion. Moreover, the cannabis and legal marijuana industry is seeing strong growth although tobacco sales are seeing a slight decline.

Let us now discuss a few ETFs providing exposure to the space.

Spirited Funds/ETFMG Whiskey & Spirits ETF WSKY

This fund focuses on providing exposure to companies across the world involved in the production and sale of whiskey and spirits. It has AUM of $15.0 million and charges a fee of 60 basis points a year. From a geographical perspective, the fund has high allocation to the United Kingdom, France and United States, with 25.9%, 25.0% and 13.5% exposure, respectively. It has an allocation of 16.9% to Diageo (LON:DGE), 9.0% to Pernod Ricard (PA:PERP) and 5.6% to Radico Khaitan. This fund has garnered $3.3 million in inflows so far this year. It has returned 28.7% in a year.

ETFMG Alternative Harvest ETF (SNX:MJ)

This fund seeks to provide exposure to companies involved in the cannabis business.

It has AUM of $371.9 million and charges a fee of 75 basis points a year. The fund’s top three holdings are GW Pharmaceuticals Plc (NASDAQ:GWPH) , Hydropothecary Corp and Medreleaf Corp, with 6.3%, 6.0% and 5.9% allocation, respectively. This fund has garnered $405.6 million in inflows so far this year. It has returned 3.0% in a year.

AdvisorShares Vice ETF (WA:ACT)

This fund is a popular ETF focused on providing exposure to companies involved in the alcohol, tobacco or cannabis business.

It has AUM of $15.0 million and charges a fee of 75 basis points a year. From a sector perspective, the fund has 53.0% allocation to alcohol businesses, 26.0% to tobacco businesses and 21.0% to Cannabis businesses. The fund’s top three holdings are AbbVie Inc (NYSE:ABBV) , Constellation Brands Inc A (NYSE:STZ) and MGP Ingredients Inc (NASDAQ:MGPI) , with 1.1%, 0.9% and 0.8% allocation, respectively. This fund has garnered $5.4 million in inflows so far this year. It has lost 0.6% in a year.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>









AbbVie Inc. (ABBV): Free Stock Analysis Report

Constellation Brands Inc (STZ): Free Stock Analysis Report

ETFMG-WSKY&SPRT (WSKY): ETF Research Reports

MGP Ingredients, Inc. (MGPI): Free Stock Analysis Report

GW Pharmaceuticals PLC (GWPH): Free Stock Analysis Report

ADVSR-VICE ETF (ACT): ETF Research Reports

ETFMG-ALT HRVST (MJ): ETF Research Reports

Original post

Zacks Investment Research

What Lies Ahead For Vice ETFs?
 

Related Articles

What Lies Ahead For Vice ETFs?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email