To paraphrase one of history’s great thinkers, Homer Simpson, whiskey is the cause of, and solution to, all of life’s problems.
As we’ve seen in the past, at least with regard to Scotch, it’s also a hell of a good investment.
In order to let even more investors in on the opportunity to turn brown into green, a new exchange-traded fund made up of 23 stocks with ties to the whiskey-and-spirits sector launched last week.
Comprised of stocks like Diageo (Johnnie Walker and Bulleit), Pernod Ricard (Chivas Regal and The Glenlivet) and Brown-Forman (Jack Daniel’s), the Spirited Funds/ETFMG Whiskey and Spirits ETF debuted with WSKY as its ticker symbol and moved about 2,000 shares on its opening day.
“Even our most bearish analysts, who were drinking whiskey when they last drafted their commentary on the market, are optimistic,” Spirited Funds CEO David Bolton told MarketWatch. Bolton added that the fund, which was trading around $25 per share as of this writing, is in prime position to capitalize on a supercycle within the whiskey industry that could last 40 years.
While his outlook is clearly on the rosier side, Bolton's theory does hold some whiskey, er, water.
“It doesn’t pay a dividend, but considering how insane our country is, these are generally stocks that maintain during a recession,” a financial services worker told us after examining the WSKY fund. “When times are bad, people still drink. They might just not buy a new mattress or car.”
Still, while the fund might be 90-proof, that doesn’t mean it’s automatically recession-proof.
“One of the criticisms of this ETF is that it’s not very diverse and that a quarter of it is made up of one stock. It’s more gin and tonic than Long Island iced tea,” Nick Martell of MarketSnacks tells us. “A trend within the the ETF industry is to make them as niche as possible.”
“This is what people like about ETFs,” added Martell’s colleague Jack Kramer. “The idea can be as simple as ‘I like whiskey, I want to invest in it.’ ETFs are great if you see a trend and want to invest in the trend instead of a specific company, but it would be nice if they had more diversity."
Either way, if you wanna take a shot, here’s the fund. Hell, it’s gotta be 5 o'clock somewhere.