Exchange traded funds (ETFs) were introduced to the stock market in the 90’s and are one of the fastest growing instruments available to investors. ETFs are an aggregate of a collection of stocks in a particular sector and now legal marijuana has its own set of ETFs.
Horizons Marijuana Life Sciences is comprised of 18 legal marijuana companies including some Canadian companies. Individual stocks tend to be more volatile than the sectors or asset classes they are organized within, but the average of a collection tends to move more slowly. Investors interested in marijuana stock could look at an ETF for a potentially less volatile instrument. With the cannabis industry in its current state, investors should still expect cannabis based ETFs to be fairly volatile.
Back in April, we covered the recently IPO’ed marijuana ETF, and the basket of underlying cannabis companies that make up its portfolio.
Since then, the ETF’s underlying index has been re-balanced, and there is a new basket of cannabis stocks to look at.
We walk you through the new basket of cannabis companies, how it’s weighted, and suggest another way you can weight your basket as well.
Let’s face it, everyone is interested in what’s going on in the cannabis industry. Whether or not people are personally interested in consuming marijuana, it can be difficult to ignore the massive growth potential of this space.
As the number of companies operating in the sector continues to grow at an astounding rate, it can be tough for the average investor to peg the individual winners and losers.
On Wednesday, April 5th the Horizons Medical Marijuana Life Sciences ETF (TSX:HMMJ) began trading on the TSX. HMMJ was the first-of-its-kind ETF offing investors direct exposure to a basket of marijuana-related companies based in Canada and the United States.
In June, Horizons announced that they’d be cutting the word medical from the fund’s name to reflect upcoming changes in Canada’s recreational marijuana laws and thus expand its investment objective to include a larger potential group of companies.
The re-named Horizons Marijuana Life Sciences ETF seeks to track the Solactive North American Medical Marijuana Index, which currently has 18 top-notch cannabis-focused constituents. HMMJ however gives investors exposure to 21 of the top cannabis companies in North America, as of data from August 22nd.
Since the ETF has more companies in its portfolio than the index, we’ll go over the ETF’s components to give investors an idea of 21 leaders in the space.
Back in April, the ETF was tracking 16 different companies. While a majority of the components have remained, new companies have been added and weightings have changed substantially since then.
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