Investors remain upbeat about medical and adult marijuana. Many of them look for a new and effective investment strategy. Cannabis ETF can turn out as an ideal platform. The marijuana Exchange Traded Fund surged as related stocks rallied recently in the market. Besides, this marketable security provides an investor exposure to the industry allowing them to choose one that suits their requirements.
The cannabis ETF grows slowly but steadily. It remains safe against volatility compared to stocks. ETFs also provide safeguards versus legal issues. This emerges as a major leap for weed investors. For instance, United States Attorney General Jeff Sessions overturned the Cole Memo of 2013. It meant that cannabis firms with assets in the USA can be closed by law enforcement authorities any time. The nullification of federal interference adversely affected cannabis stocks. Exchange Traded Funds that cover both Canadian and US shares give investors some solace.
Choice of Marijuana ETFs
Some marijuana enterprises have given investors more choices in line with complete legalization of adult pot in Canada. These options include diverse forms of investment. Horizons Marijuana Life Sciences Index represents the biggest ETF offering in the market today. This cannabis ETF is listed on the Toronto Stock Exchange. This Exchange Traded Fund became the first to enter the marijuana market delivering remarkable returns for those who invested early. Current Assets under Management (AUM) remains at C$726 million.
Alternative Harvest ETF was the first cannabis ETF offered in the United States. It monitors American and Canadian cannabis firms along with other assets worldwide. This Fund maintains several marijuana-related stocks like the Horizons ETF. The companies are Aurora, Canntrust, Canopy Growth, Cronos Group, Green Organic Dutchman, GW Pharmaceuticals, Hydropothecary, and Organigram. It also has Emerald Health Therapeutics and Tilray.
Alternative also holds 20 stocks in the pharmaceuticals and tobacco sectors. Corporations as far as Europe (Denmark) are part of the ETF. Alternative charges 0.75% management fee excluding tax on all shareholders. Alternative’s assets were valued at US$457 million.
Evolve Management (Toronto Stock Exchange) owns assets worth $6.6 million making it the smallest player in the market. Majority of Evolve’s holdings are from Canada with some Australian firms in the mix. These companies are like those maintained by Alternative except for Aphria, CannaRoyalty, CannTrust Holdings, and TerrAscend. It has Neptune Technologies compared to other cannabis ETFs.
A Look at Performance
Most marijuana stocks in the global market along with exchange traded funds by extension undergo extreme fluctuations. These swings are in line with legislative occurrences in Canada and the United States. Even then, cannabis ETFs have gained a position in the marketplace. These Funds invest more in biotech and pharma enterprises instead of local dispensaries or small stores. Large weed companies conduct pioneering research on medical applications for compounds in pot called cannabinoids.
Potential investors must understand closely how these ETFs work together with risks and rewards before deciding to include these assets in their investment portfolios.
For more Cannabis Business News