In what could be called the anti-SRI (socially responsible investing) exchange-traded fund, AdvisorShares has filed a registration statement with the Securities and Exchange Commission for a fund that invests in companies that get at least half of their revenue from tobacco and alcoholic beverages, along with companies that get the same proportion of sales from marijuana and hemp, cannabis or cannabinoid-related products.

The AdvisorShares Vice ETF (ACT) is an actively managed fund that aims to cash in on people’s bad habits (and the growing business of cannabis-based medical products). As described in the fund’s prospectus, the words “marijuana” and “cannabis” are used interchangeably and can cover a host of applications including agriculture, biotechnology, pharmaceutical, real estate, retail, and finance. The fund managers believe greater public and legislative acceptance of cannabis could create a growth industry.

Hemp pertains to the industrial/commercial use of the cannabis stalk and seed for textiles, foods, papers, body care products, detergents, plastics and building materials.

In fund literature provided by AdvisorShares, the Bethesda, Md.-based ETF provider says alcohol and tobacco companies have some of the highest profit margins in the consumer products space, are among the best dividend payers and generally are recession-proof. (Of course, that doesn’t mean their stocks won’t fall during a broad stock market downturn.)

Regarding the fund’s place in an investor’s portfolio, the company envisions ACT as a satellite equity holding. The fund, which is expected to launch in December, has a net expense ratio of 0.75 percent.

ACT would be the first U.S.-listed ETF focused on alcohol, tobacco and cannabis. A somewhat comparable vice-related mutual fund, the USA Mutuals Vice Fund Investor Class Shares (VICEX), launched in 2002 (other share classes came later) and focuses on the tobacco, alcohol, gaming and aerospace industries. It doesn’t include cannabis businesses. The fund’s 15-year annualized return of 10.93 percent exceeds the 9.37 percent return on the S&P 500 Index during that period, according to Morningstar. The fund, which charges 1.49 percent and has $227 million in assets, is up 16.88 percent year-to-date, or just a hair less than the S&P 500.

Dan Ahrens, managing director and chief operating officer at AdvisorShares and who is one of the ACT fund’s two portfolio managers, was the founder and original portfolio manager of the Vice Fund mutual fund.

In February, ETF Managers Group LLC filed with the SEC for the Emerging AgroSphere ETF, an index-based fund that would invest in companies making prescription drugs using cannabis extracts, selling hemp derivatives and other related stocks. That fund has yet to launch.

In April, the Horizons Marijuana Life Sciences ETF (HMMJ) debuted on the Toronto Stock Exchange as the first North American ETF focused on the legal marijuana market. The fund has garnered US$190 million in assets. It stumbled out of the gate and had dropped 18 percent as of late August, but has since rallied and is up more than 27 percent since inception.