Amplify Alternative Harvest ETF (MJ)

Overview

The Amplify Alternative Harvest ETF (YOLO) is an actively managed ETF that seeks to invest in companies and equity securities of companies that are involved in the cannabis industry and its ancillary businesses. This includes companies engaged in the cultivation, production, distribution, and sale of cannabis and hemp-based products, as well as companies providing products and services to the cannabis industry.

Reputation and Reliability

Amplify ETFs is a relatively new player in the ETF space, founded in 2015. They focus on thematic and alternative investment strategies. Their reputation is still developing but they aim to provide innovative ETF solutions.

Management Expertise

The ETF is managed by Amplify ETFs, with research and advisory services provided by Cambria Investment Management, LP. Cambria is known for its value-oriented and often contrarian investment approach.

Goal

To provide capital appreciation by investing in companies poised to benefit from the growth of the legal cannabis industry.

Investment Approach and Strategy

Strategy: This is an actively managed ETF, meaning the fund managers have discretion to select and overweight or underweight specific securities within the cannabis sector, rather than strictly tracking an index.

Composition The ETF primarily holds equities of companies in the cannabis and hemp industries. This includes growers, processors, distributors, retailers, and companies providing related products and services. It may also invest in derivatives and other instruments.

Market Share: As a niche sector ETF, YOLO holds a smaller market share compared to broad-based ETFs. Specific market share data for this niche is not readily available and fluctuates frequently.

Total Net Assets (AUM): 68000000

Key Competitors

• ETFMG Alternative Harvest ETF (MJ)
• Cannabis ETF (THCX)
• AdvisorShares Pure Cannabis ETF (YOLO)

Competitive Landscape

The cannabis ETF market is highly competitive and volatile. YOLO's advantage lies in its active management and focus on companies potentially benefiting from a broad range of cannabis-related activities. However, it faces strong competition from established players like MJ, which often have larger AUM and broader investor recognition. The primary disadvantage is the inherent volatility and regulatory uncertainty within the cannabis sector, which impacts all competitors.

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Benchmark Comparison: As an actively managed ETF in a niche sector, YOLO does not typically track a single, well-defined benchmark in the same way as passive ETFs. Its performance is best evaluated against its own peers and the overall performance of the cannabis industry.

Expense Ratio: 0.75

Average Trading Volume

The ETF has an average daily trading volume that indicates moderate liquidity, with a sufficient number of shares trading daily to facilitate most investor needs.

Bid-Ask Spread

The bid-ask spread for YOLO is typically wider than that of highly liquid ETFs, reflecting the specialized nature of its underlying assets and the associated trading costs.

Market Environment Factors

The performance of YOLO is heavily influenced by evolving legal landscapes surrounding cannabis in various countries and US states, shifts in consumer demand, regulatory changes, and the financial health of individual companies within the sector. Macroeconomic factors can also impact investor sentiment towards speculative sectors.

Growth Trajectory

The growth trajectory of YOLO is directly tied to the expansion and regulation of the global cannabis market. While the long-term outlook for the industry is positive, short-to-medium term performance can be erratic due to regulatory hurdles and market competition. The ETF's strategy may adjust holdings based on evolving opportunities and risks within this dynamic sector.

Competitive Edge

YOLO's competitive edge stems from its active management strategy, which allows for nimble adjustments to capitalize on emerging opportunities within the volatile cannabis sector. Its focus on a diverse range of companies, from growers to ancillary service providers, offers broad exposure. The research provided by Cambria Investment Management aims to identify undervalued companies within this niche, potentially offering alpha generation opportunities that passive ETFs might miss.

Volatility

YOLO exhibits high historical volatility, characteristic of ETFs focused on emerging and highly regulated industries. Its price movements can be significant and rapid in response to news and regulatory developments.

Market Risk

The specific market risks for YOLO include regulatory uncertainty and changes in the legal status of cannabis, which can drastically impact the profitability and operations of its holdings. Competition within the sector is intense, and companies face operational challenges and potential delisting risks due to their industry. Political risk and shifts in public opinion also pose significant threats.

Ideal Investor Profile

The ideal investor for YOLO is an aggressive investor with a high-risk tolerance, who believes in the long-term growth potential of the legal cannabis industry and is willing to accept significant volatility for potentially high returns.

Market Risk

YOLO is best suited for long-term investors who have a strong conviction in the cannabis sector and can withstand substantial short-term price swings. It is less suitable for conservative investors or those seeking stable, predictable returns.

The Amplify Alternative Harvest ETF (YOLO) offers actively managed exposure to the dynamic and evolving cannabis industry. While it aims to capitalize on the sector's growth potential, it is characterized by high volatility and significant regulatory risks. Its competitive landscape is robust, and investors should have a high-risk tolerance and a long-term investment horizon. The ETF's performance is intrinsically linked to the complex legal and market dynamics of the global cannabis market.

Data Sources:

• Amplify ETFs Official Website
• Financial Data Providers (e.g., Morningstar, ETF.com)

Disclaimers:

This information is for informational purposes only and does not constitute investment advice. Investing in ETFs, especially those in niche or emerging sectors, involves risks. Past performance is not indicative of future results. Investors should conduct their own due diligence and consult with a financial advisor before making investment decisions.