Stock exchange sees ‘first of its kind’ spirits fund

A “first of its kind” Exchange-traded Fund (ETF) for the spirits sector has been launched, providing stock exchange investors access to the industry as it enters “a new period of demand growth”.

The ETF will will track companies in developing and emerging markets that produce spirits

The Spirited Funds/ETFMG Whiskey & Spirits ETF – known as WSKY – will track companies in developing and emerging markets that produce alcoholic beverages, such as Pernod Ricard, Diageo, Thai Beverage, Brown-Forman, and United Spirits.

Trading on the NYSE Arca – a Chicago-based exchange on which both stocks and options are traded – the ETF will allow investors “diversified access” to the industry.

“We believe we’re at year five of a 25-40 year supercycle that could see continued growth in consumer demand for whiskey and spirits, much like what has occurred with craft breweries over the past two decades,” said David Bolton, president and CEO at Spirited Funds.
“Our new Exchange-traded Fund is the first to provide exposure to this global industry – with the overall alcohol industry boasting sales of more than US$1 trillion per year.”

According to the prospectus, companies included in WSKY’s index must have market capitalisations of at least US$100 million, and meet ‘minimum standards’ in terms of liquidity and length of time listed.

The index has two tiers: ‘core’ and ‘non-core’. Firms that include the operation of a whiskey distillery and the production of alcoholic beverages, classified as ‘core’ companies, while ‘non-core’ include luxury goods firms “that have at least US$500 million in annual whiskey and spirits sales” and soft-drink companies that are “involved in whiskey distribution, or derive the majority of their revenues from the provision of mixers”.

Sam Masucci, founder and CEO of ETF Managers Group, said: “The spirits business is global and well established, and appears to be entering a new period of demand growth as consumers migrate to premium brands. We’re excited to have the opportunity to introduce this first-of-its-kind fund.”