ETF’s (exchange-traded funds) are a type of bundled investment (ie: group of stocks). ETF’s trade like stocks on stock market exchanges (ie: NYSE). ETF’s are cheaper to invest in than mutual funds.
Currently, there has been much excitement over exotic, niche, hyper-targeted ETF’s like the fairly new 3 marijuana ETF’s.
The hottest of these right now is the ETFMG Alternative Harvest, which is a passively managed collection of marijuana industry stocks, which pays dividends.
Each of the ETF’s chosen marijuana stocks must have a minimum market cap of $200 million dollars.
The ETF’s largest holdings are concentrated in Canadian-based marijuana or marijuana-related companies, which make up 41% of the portfolio by market value.
The United States and United Kingdom round out its three largest country exposures, making up 34% and 9% of the portfolio, respectively.
|Name||% Total Net Assets||Ticker||Shares Held||Market Value USD|
|CANOPY GROWTH CORP||9.13||WEED CN||1576433||$57995664.04|
|AURORA CANNABIS INC COM||8.76||ACB CN||8197285||$55668957.93|
|TILRAY INC COM CL 2||8.11||TLRY||543656||$51533152.24|
|CRONOS GROUP INC COM||7.96||CRON||6811140||$50538658.80|
|GW PHARMACEUTICALS PLC ADS||6.61||GWPH||305395||$41988758.55|
|CANNTRUST HOLDINGS INC||4.51||TRST CN||4096237||$28658288.07|
|CORBUS PHARMACEUTICALS HLDGS COM||4.39||CRBP||4187801||$27890754.66|
|HYDROPOTHECARY CORP NEW COM||4.05||HEXO CN||5747391||$25758958.17|
|EMERALD HEALTH THERAPEUTICS IN COM||3.58||EMH CN||7713147||$22733634.49|
|ORGANIGRAM HOLDINGS INC||3.34||OGI CN||4984435||$21241458.66|
Most importantly, ETFMG Alternative Harvest has a low-expense ratio, which is currently 0.75%.
That means you only pay $7.50 in annual fees per every $1,000 you invest.
So you could invest $10,000 into it and only pay $75.00 in annual fees, which is crazy low and beneficial for the investor.
If you have a decent chunk of money you’d like to invest (ie: old 401K), an ETF could be a smart choice.
Marijuana is an emerging market. As such, investing in the marijuana industry is high-risk, high-reward. Vast fortunes can be made quickly. And also lost quickly, so beware.
Marijuana ETF’s tend to invest in the pharmaceutical and biotech companies doing cutting-edge research into medical applications. They also tend to supplement their marijuana exposure with the variety of companies allied to the marijuana industry in some way.
The legality of marijuana in the United States is in a quickly-fluctuating jurisdictionally grey area right now. Although still illegal at the federal level, marijuana is being legalized for recreational use by various states.
It’s every investors dream to catch the rising tide of a hot, new emerging market. Find out what decision is best for you.
ETFMG Alternative Harvest