The Horizons Marijuana Life Sciences Index ETF, based on the North American Marijuana Index, peaked at € 17.70 in mid-October, with the euphoria for cannabis stocks peaking at the time the Canadian government issued on October 17 the cultivation, sale and consumption of marijuana throughout Canada have now fallen to less than 12 euros.
Overall, the ETF, which launched on 4 April 2017, lost around four percent this year. Over the past twelve months, it has even gained about 30 percent. If you are a little longer, you still have no reason to be dissatisfied with management fees of 0.75 percent a year.
Nearly 74 percent of assets are currently invested in the ETF’s top ten equity positions. The largest position with 11.3 percent (as of 31.10.2018) is the share of marijuana company Canopy Growth, which is also the largest by market capitalization.
In the other four places we find the four next largest companies with a share of ten percent each, so that 50 percent of the assets are distributed among the five largest companies in the industry. This means that the risk weighs on a not insignificant part on a few shoulders.
There are currently 49 stocks in the portfolio, of which about 87 percent are attributable to the healthcare sector. About 78 percent of the shares are from Canada, just over 12 percent from the US. Of course, providers are of the opinion that investors are investing in a brilliant growth market. The North American market is expected to reach $ 24.5 billion in 2021. In 2016, it was still 6.7 billion dollars, according to Horizons.
Investors should always keep in mind, however, that this is a very young market and involves considerable risks. Nobody knows how the industry will develop and whether the sometimes euphoric hopes that go with the release are really justified. In any case, quite a high level of volatility is to be reckoned with, especially as some companies in the sector were unable to meet the high expectations in the past quarterly season.