Share-split context: A reverse split was recorded on Sep 10, 2024 with coefficient 0.1. A reverse split combines multiple old shares into fewer new shares and mechanically raises the quoted price per share. That mechanical increase does not restore lost investment value. The returns in this report are already split-adjusted, while reverse-split history remains a separate structural warning.

ETF Education Report: ADVISORSHARES PSYCHEDELICS ETF (PSIL)

What this ETF is trying to do

The ADVISORSHARES PSYCHEDELICS ETF (ticker: PSIL) is an exchange-traded fund that focuses on a specific area of the healthcare industry. Based on its top holdings, it invests in companies involved in various pharmaceutical and neuroscience research.

What the numbers show

When looking at how an ETF performs, it is important to look at two different things: price return and total return.

• Price Return: This measures only the change in the share price.

• Total Return: This includes both the share price changes and any cash distributions (dividends) paid out.

For PSIL, the numbers show:

• Year-to-Date (YTD): The price return is approximately 23.24%. The total return is also approximately 23.24%.

• One-Year: The price return was about 4.45%, while the total return was higher at approximately 14.53%.

• Three-Year: The price return was about 38.30%, and the total return was approximately 56.91%.

It is important to note that this ETF has a history of a reverse split. In a reverse split, multiple old shares are combined into fewer new shares. This causes the price per share to rise mechanically, but it does not increase the actual value of your investment.

Income and distribution explanation

This ETF has a distribution yield of approximately 7.96%. This number describes the cash distributions relative to the ETF's price. However, a high yield does not mean an investor earned that percentage as their total return.

The distributions for this ETF are described as "irregular" or "less frequent." In the last 12 months, there was one payout.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price can sometimes be related to erosion, they are not the same thing.

StockValueFinder uses an erosion-risk score to measure this risk. PSIL has an erosion score of 94, which is labeled as "Stable / sideways," and the erosion severity is rated as "good." There is no severe erosion-risk flag for this ETF.

Top Holdings

The following are the top holdings in this portfolio (note that this is a partial list):

• COMPASS PATHWAYS PLC ADR: 12.19%

• DEFINIUM THERAPEUTICS INC: 11.11%

• HELUS PHARMA INC: 9.17%

• NEURONETICS INC: 4.84%

• RELMADA THERAPEUTICS INC: 4.76%

• GH RESEARCH PLC: 4.62%

• NRX PHARMACEUTICALS INC: 4.61%

• ABBVIE INC: 4.35%

• ALTO NEUROSCIENCE INC: 4.23%

• NEUROCRINE BIOSCIENCES INC: 4.21%

Pros

• The ETF has shown positive total returns over the one-year and three-year periods.

• The erosion-risk score suggests a stable trend.

Cons

• The distribution frequency is irregular.

• The five-year total return was approximately -71.67%.

Beginner takeaway

When looking at ETFs like PSIL, remember that price returns and total returns are different. Always look at the total return to see how much you actually earned including distributions. Also, remember that a high distribution yield is not a guarantee of profit and does not protect the original amount you invested.