Defiance ETFs filed a Registration Statement with the SEC on March 5th, 2021, for a “Next Gen Altered Experience ETF.” They will be using the reserved ticker “PSY” which will be listed on the New York Stock Exchange.
The fund will be using a “rules-based index that tracks the performance of a portfolio of life sciences companies conducting federally legal medical activities in the psychedelics, medical cannabis, hemp, and cannabidiol (“CBD”) industries whose common stock or depositary receipts are listed on a U.S. or Canadian exchange.”
The ETF will invest 35% in psychedelics healthcare companies and 65% in medical cannabis companies, with no more than 8% of the ETF’s capital in a single company.
Management fees are currently undetermined, but based on other ETFs that Defiance runs, less than 0.50% may be expected. Defiance currently offers $FIVG (focused on 5G tech), $IBBJ (small cap biotech), $QTUM (quantum computing), and $SPAK (the first SPAC ETF). None of their ETFs have a management fee over 0.45%.
The only other ETF that currently focuses on psychedelics companies is the first-to-market $PSYK ETF, run by Horizons ETF with over $55mm CAD under management. $PSYK trades on the Candian based NEO Exchange, is priced in Canadian dollars, and has a 0.85% management fee.
With Defiance’s intent to launch $PSY, the growing psychedelic market will continue to see increased demand from investors, especially now from US based investors. Likewise, investors will have better access to the broader psychedelics ecosystem, allowing for more diversified investing.