An exciting new cannabis exchange-traded fund (ETF) just hit the New York Stock Exchange (NYSE) and it brings with it a few unique characteristics which will help separate it from established cannabis ETFs - like the ETFMG Alternative Harvest (NYSE: MJ).
The new ETF, fittingly named The Cannabis ETF, trades under the stock ticker symbol of THCX. The Cannabis ETF includes shares from cannabis corporations like Aurora Cannabis, Canopy Growth, Charlotte’s Web Holdings, GW Pharmaceuticals, and more. Overall, the ETF has a focus on legal cannabis markets and has an eye on CBD and hemp industries as well. THCX is also the first of its kind to be backed and launched by Innovation Shares, which is known for its sponsorship of unique ETFs. THCX opened yesterday at $24.50/share.
One of the most notable perks to The Cannabis ETF is the fact that it is currently the cannabis-related ETF with the lowest management fee associated with it. The other cannabis ETFs on the NYSE, The ETFMG Alternative Harvest and The AdvisorShares Pure Cannabis ETF (NYSE: YOLO), have a higher percentage management fee or a higher net expense ratio percentage. Another unique characteristic of THCX is that the ETF is the first passively managed cannabis ETF with no connection to any alcohol or tobacco stocks. It is also unique that the Cannabis ETF will rebalance every month. This monthly rebalance of the ETF sets it apart from the multitude of others which instead rebalance only four times a year on a quarterly basis.
Matt Markiewicz, Managing Director of Innovation Shares, wrote: “Rebalancing on a monthly basis not only allows the fund to take advantage of a constantly evolving cannabis capital markets environment but should help smooth out some of the longer term volatility that is often associated with a burgeoning industry. This is a chance for serious investors who recognize the potential of a generational investment opportunity but have wavered on buying specific stocks.”
It is also noteworthy that the ETF has been purposefully positioned to greatly benefit from 35 cannabis stocks that are believed to increase in value from future expansions within the cannabis market value on a global scale. A current projection of the global cannabis market shows an estimated value of $630 billion by the year 2040.
“With several regulatory catalysts on the horizon in the U.S. and abroad, the current cannabis environment presents an exciting opportunity for investors. One area which has witnessed explosive growth since the signing of last year’s U.S. Farm Bill is the hemp-derived CBD industry. Several of the companies in the portfolio are actively participating in this CBD boom by cultivating hemp, providing extraction services or by using CBD for applications in the pharmaceutical, health and consumer wellness markets,” wrote Markiewicz.
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