AdvisorShares Pure Cannabis ETF (YOLO US) – Portfolio Construction Methodology

The investment strategy underpinning the actively managed AdvisorShares Pure Cannabis ETF seeks long-term capital appreciation by concentrating in cannabis-related equities and derivatives while remaining compliant with applicable cannabis laws. Under normal circumstances at least 80% of net assets are invested in issuers deriving ≥50% of revenue from marijuana or hemp businesses, plus derivatives with similar economic exposure, primarily mid- and small-cap common and preferred stocks, an affiliated US-focused cannabis ETF and total return swaps referencing cannabis equities. The investable universe spans agriculture, biotechnology, pharmaceuticals, real estate, retail and financial services, with additional exposure to firms expected to generate future cannabis-related revenues or DEA-registered companies conducting lawful cannabinoid research. The portfolio is non-diversified and concentrates ≥25% in the pharmaceuticals, biotechnology and life sciences industry group, with selection driven by research tools and bottom-up assessment of market position, growth potential and valuation, and sells driven by relative opportunity or position-size limits.

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