Roundhill Cannabis ETF (WEED) Waives Fees to 0.00%
Roundhill Investments has announced a fee waiver for its Roundhill Cannabis ETF (Cboe: WEED), effective July 1, 2024, through at least July 1, 2025. This ETF, which provides exposure to leading U.S. multi-state cannabis operators, will have an all-in expense ratio of 0.00%, down from its current 0.40%. This move is positioned to capitalize on potential regulatory changes, including the anticipated reclassification of cannabis to Schedule III, which could act as a catalyst for the sector. CEO Dave Mazza suggests that this fee waiver is a strategic measure to attract investors who are optimistic about the future of the U.S. cannabis market.
- Roundhill Cannabis ETF (WEED) will have a 0.00% expense ratio until July 1, 2025.
- Fee waiver aims to attract investors by reducing costs, potentially increasing fund inflows.
- Anticipated regulatory changes, such as cannabis reclassification to Schedule III, could act as a positive market catalyst.
- The fee waiver indicates potential investor hesitancy and slow regulatory reform in the cannabis sector.
Insights
The decision by Roundhill Investments to waive fees for the Roundhill Cannabis ETF (Cboe: WEED) until July 1, 2025, is a strategic move to attract more investors, especially given the stagnation in the cannabis sector due to slow regulatory reform. A 0.00% expense ratio is a rare but enticing offer that could significantly increase investor interest in the ETF.
Expense ratios are the annual fees that ETF investors must pay to cover the fund's expenses. Lowering this to zero essentially eliminates a cost barrier for potential investors, making the fund more attractive compared to other cannabis ETFs that still charge fees. Additionally, the upcoming reclassification of cannabis to Schedule III, mentioned by the CEO, implies a more favorable regulatory environment, which could boost the industry's growth.
Retail investors should understand that while a lower expense ratio is beneficial, it doesn't guarantee higher returns. The performance of the ETF still largely depends on the underlying cannabis stocks and the overall market conditions. However, in a sector currently struggling with regulatory hurdles, removing expense fees can provide a much-needed boost in investment flows, potentially increasing liquidity and stabilizing stock prices in the fund.
From a financial perspective, waiving the expense ratio of the Roundhill Cannabis ETF to 0.00% until July 1, 2025, is an aggressive strategy aimed at gaining market share. Normally, ETFs charge fees to cover administrative and operational costs. By waiving these fees, Roundhill is essentially forgoing a revenue stream in the hope of attracting a larger asset base.
This tactic could be effective in the short term, especially as potential investors compare the cost benefits of WEED over other ETFs. However, it's important to consider the long-term sustainability of this approach. If the ETF does not gather sufficient assets, Roundhill might struggle to recoup the lost fees once the waiver period ends.
For investors, the 0.00% expense ratio temporarily increases returns by eliminating the expense drag. But the overall financial health of the ETF and its future performance will remain contingent on the growth and profitability of the underlying cannabis companies, alongside broader market trends and forthcoming regulatory changes. Always weigh these factors critically before making investment decisions.
WEED ETF will offer expense ratio of
"While regulatory reform for the cannabis sector has been slower than anticipated, we believe that the upcoming reclassification to Schedule III can serve as a much needed catalyst for the space," said Dave Mazza, Chief Executive Officer at Roundhill Investments. "As part of introducing our fee waiver, we would encourage investors to consider WEED as a targeted vehicle to express a view on positive momentum in
As detailed below, Roundhill will waive and limit the Fund's Total Annual Fund Operating Expenses to
Fund Name | Ticker | Current Net | New Net |
Roundhill Cannabis | WEED | 0.40 % | 0.00 % |
1 Net expenses reflect fees incurred by the Fund after waivers and reimbursements -- fee waivers for WEED are contractual and in |
About Roundhill Investments:
Founded in 2018, Roundhill Investments is an SEC-registered investment advisor focused on innovative exchange-traded funds. Roundhill's suite of ETFs offers unique and differentiated exposures across thematic equity, options income, and trading vehicles. Roundhill offers a depth of ETF knowledge and experience, as the team has collectively launched more than 100+ ETFs including several first-to-market products. To learn more about the company, please visit roundhillinvestments.com.
Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the WEED Cannabis ETF please call 1-855-561-5728 or visit the website at www.roundhillinvestments.com/etf/WEED. Read the prospectus or summary prospectus carefully before investing.
The statements and forecasts above are subject to significant business, economic, and competitive uncertainties. Accordingly, there can be no assurance that such statements, estimates and projections will be realized, and no representations are made as to the accuracy or completeness of such statements and forecasts. Such statements and forecasts are not indicative of future investment performance. ETF characteristics and allocations are subject to change at any time.
Investing involves risk, including possible loss of principal.
Because the Fund is "non-diversified," it may invest a greater percentage of its assets in the securities of a single issuer or a lesser number of issuers than if it was a diversified fund. As a result, the Fund may be more exposed to the risks associated with and developments affecting an individual issuer or a lesser number of issuers than a fund that invests more widely. This may increase the Fund's volatility and cause the performance of a relatively small number of issuers to have a greater impact on the Fund's performance.
Companies involved in the cannabis industry face intense competition, may have limited access to the services of banks, may have substantial burdens on company resources due to litigation, complaints or enforcement actions, and are heavily dependent on receiving necessary permits and authorizations to engage in medical cannabis research or to otherwise cultivate, possess or distribute cannabis. Since the cultivation, possession, and distribution of cannabis can be illegal under
Cannabis-related companies are subject to various laws and regulations that may differ at the state/local and federal level. Laws and regulations related to the possession, use (medical or recreational), sale, transport and cultivation of marijuana vary throughout the world, and the Fund will only invest in non-
In addition, cannabis-related companies are subject to the risks associated with the greater agricultural industry, including changes to or trends that affect commodity prices, labor costs, weather conditions, and laws and regulations related to environmental protection, health and safety. Cannabis-related companies may also be subject to risks associated with the biotechnology and pharmaceutical industries. These risks include increased government regulation, the use and enforcement of intellectual property rights and patents, technological change and obsolescence, product liability lawsuits, and the risk that research and development may not necessarily lead to commercially successful products.
As an ETF, the fund may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Due to the costs of buying or selling Shares, including brokerage commissions imposed by brokers and bid/ask spreads, frequent trading of Shares may significantly reduce investment results and an investment in Shares may not be advisable for investors who anticipate regularly making small investments.
The Fund is a recently organized investment company with no operating history. Please see the prospectus for details of these and other risks.
Fund is distributed by Foreside Fund Services, LLC.
Foreside Fund Services and Roundhill Investments are unaffiliated companies.
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SOURCE Roundhill Investments
FAQ
What is the new expense ratio for Roundhill Cannabis ETF (Cboe: WEED)?
How long will Roundhill Cannabis ETF (WEED) maintain a 0.00% expense ratio?
Why did Roundhill Investments waive the fees for WEED ETF?
What is the significance of the anticipated cannabis reclassification to Schedule III for WEED ETF?
What was the previous expense ratio for Roundhill Cannabis ETF (WEED)?
