The CYA ETF, also known as the Cannabis Yield ETF, is an actively managed exchange-traded fund that seeks to provide investment results that are two times (2x) the daily total return of the US Cannabis ETF, which focuses on companies involved in the marijuana and hemp business in the United States.

How does the CYA ETF achieve its investment objective?

The CYA ETF aims to achieve its investment objective by entering into one or more swap agreements on the US Cannabis ETF, which allows it to obtain economically-leveraged investment results relative to the returns of the US Cannabis ETF.

What type of companies does the US Cannabis ETF, and subsequently the CYA ETF, invest in?

The US Cannabis ETF, and by extension, the CYA ETF, primarily invests in securities of companies that derive at least 50% of their net revenue from the marijuana and hemp business in the United States. These companies can be from various sectors and industries, including agriculture, biotechnology, pharmaceuticals, real estate, retail, and finance.

What is the investment approach of the CYA ETF?

The CYA ETF employs an active management strategy, and it will concentrate at least 25% of its investments in the Pharmaceuticals, Biotechnology & Life Sciences Industry Group within the Health Care Sector. It is a non-diversified fund, meaning it may invest a greater percentage of its assets in a particular issuer than a diversified fund.

What are the potential growth prospects for the CYA ETF?

The Advisor of the CYA ETF believes that continued legislative changes and social acceptance of cannabis in its various formats could lead to significant growth in cannabis-related public corporations. Additionally, companies involved in the cannabis-related business could benefit from merger and acquisition activity as the cannabis market matures.

4 min read

By Beqa Bumbeishvili, ETF Insider

What is the CYA ETF ?

In the world of finance, Exchange-Traded Funds (ETFs) have gained immense popularity as investment instruments due to their diversified nature and easy tradability. One such ETF that has been making waves in the financial market is the CYA ETF. In this article, we will provide an overview of the CYA ETF, understand its underlying and exposure, explore the benefits of investing in this ETF, and consider essential factors to ponder before investing.

CYA ETF: Overview

The CYA ETF is an actively managed "fund of funds" ETF, meaning it achieves its investment objective by investing in other ETFs and fixed income assets. Managed by reputable financial advisors, this ETF aims to provide investors with exposure to various income-generating assets while mitigating downside risks associated with equity investments.

CYA ETF Underlying and Exposure: What Does It Track and How?

The primary investment strategy of the CYA ETF is to invest in fixed income and income-generating ETFs. These ETFs may include affiliated funds managed by the advisor and are selected based on their distribution or income yield. For instance, the CYA ETF may invest in ETFs that focus on Real Estate Investment Trusts (REITs) or Master Limited Partnerships (MLPs), or those seeking inverse exposure to the S&;P 500 VIX Short-Term Futures Index.
Additionally, the CYA ETF employs a downside mitigation strategy, where up to 20% of its portfolio may be invested in derivatives to hedge against potential equity market downturns. The derivatives used for hedging purposes may include puts and put spread options on ETFs, interest rate futures and options, credit default swap index options, and over-the-counter foreign exchange (FX) futures and options.

CYA ETF: Benefits of Investing

Investing in the CYA ETF offers several advantages for investors. Firstly, the ETF provides exposure to a diversified basket of income-generating assets, reducing individual company risk. Secondly, the active management of the ETF allows for dynamic adjustments to its portfolio, taking advantage of market opportunities and safeguarding against sudden declines through its risk reduction strategies. Moreover, the ETF's downside mitigation strategy helps protect investors from potential market downturns, providing a level of comfort during volatile periods.

CYA ETF: Considerations Before Investing

While the CYA ETF presents compelling benefits, investors should consider certain factors before committing their capital. As an actively managed ETF, it incurs management fees, which can impact overall returns. Additionally, the ETF's performance is subject to the expertise and decision-making of the portfolio managers, and past performance is not indicative of future results. Investors should assess their risk tolerance and investment objectives to ensure that the CYA ETF aligns with their financial goals.

Conclusion:

The CYA ETF offers a unique investment opportunity for those seeking exposure to income-generating assets while actively managing downside risks. However, it's crucial for investors to conduct thorough research and consult with financial advisors before making any investment decisions. Remember, the information provided here is for educational purposes only and not to be considered as investment advice.

Disclaimer: This article does not provide any investment advisory services. The content presented is solely for informational purposes, and readers should seek professional advice from licensed financial advisors before making any investment decisions.

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FAQ

What is the CYA ETF?
The CYA ETF, also known as the Cannabis Yield ETF, is an actively managed exchange-traded fund that seeks to provide investment results that are two times (2x) the daily total return of the US Cannabis ETF, which focuses on companies involved in the marijuana and hemp business in the United States.
How does the CYA ETF achieve its investment objective?
The CYA ETF aims to achieve its investment objective by entering into one or more swap agreements on the US Cannabis ETF, which allows it to obtain economically-leveraged investment results relative to the returns of the US Cannabis ETF.
What type of companies does the US Cannabis ETF, and subsequently the CYA ETF, invest in?
The US Cannabis ETF, and by extension, the CYA ETF, primarily invests in securities of companies that derive at least 50% of their net revenue from the marijuana and hemp business in the United States. These companies can be from various sectors and industries, including agriculture, biotechnology, pharmaceuticals, real estate, retail, and finance.
What is the investment approach of the CYA ETF?
The CYA ETF employs an active management strategy, and it will concentrate at least 25% of its investments in the Pharmaceuticals, Biotechnology & Life Sciences Industry Group within the Health Care Sector. It is a non-diversified fund, meaning it may invest a greater percentage of its assets in a particular issuer than a diversified fund.
What are the potential growth prospects for the CYA ETF?
The Advisor of the CYA ETF believes that continued legislative changes and social acceptance of cannabis in its various formats could lead to significant growth in cannabis-related public corporations. Additionally, companies involved in the cannabis-related business could benefit from merger and acquisition activity as the cannabis market matures.

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