Cannabis ETF Adds 10 New Holdings as Part of Quarterly Update

One of the first public exchange-traded funds (ETF) for the cannabis industry has now added 10 more listings for investors to rely on.

On Monday (March 19) Horizons ETFs Management announced a quarterly rebalance for the Horizons Marijuana Life Sciences Index ETF (TSX:HMMJ). Thanks to this update, an additional 10 more cannabis stocks, increase the ETFs holdings to 37 as of Tuesday.

“It’s exciting to see an increase in the number of investable companies that qualify to be included in HMMJ’s portfolio,” Steve Hawkins, president and Co-CEO of Horizons ETFs said in a statement.

Hawkins added as the industry moves closer to legalization for adult-use of cannabis in Canada, he has seen the entire sector “rapidly grow in size and breadth.”

This growth was made even more evident for the Horizons ETFs Management as it launched an additional marijuana ETF this year. The Horizons Emerging Marijuana Growers Index ETF (AQN:HMJR) launched on the Aequitas NEO Exchange on February 14.

The most recent ETF offers investors exposure to marijuana producers that are smaller in market capitalization.

The brand new holdings available on the Horizons Marijuana Life Sciences Index ETF are:

• Abattis Bioceuticals (CSE:ATT)
• Beleave (CSE:BE)
• HIKU Brands (CSE:HIKU)
• Isodiol International (CSE:ISOL)
• National Access Cannabis (TSXV:NAC)
• Neptune Technologies and Bioressources (TSXV:NEPT)
• Nuuvera (TSXV:NUU)
• Tetra Bio-Pharma (TSXV:TBP)
• Terrascend (CSE:TER)
• THC Biomed International (CSE:THC)

“Our clinical approach and pipeline of products are unique and being added to this index reinforces the credibility of our approach to the financial community,” Bernard Fortier, CEO of Tetra Bio-Pharma said in a statement.

So far in 2018, the Horizons Marijuana Life Sciences Index ETF has decreased in value 8.30 percent, up until market closure on Monday, representing a loss of $1.76 per share. At market closure on Tuesday (March 20), the ETF finished the day at $19.04.

Are investors getting the proper value from investing in ETFs?

Providing commentary for the industry, Alan Brochstein, cannabis analyst with 420 Investor wrote a column in Forbes detailing why, in his opinion, investors may want to hold on cannabis-focused ETFs despite their appeal.

“While I like the concept of an investment fund targeting cannabis stocks, the ones that have been created thus far are not well constructed for the most part,” Brochstein wrote.

Brochstein said his initial reservations with Horizons Marijuana Life Sciences Index ETF related to the inclusion of some biotech stocks, which he opined have had a negative impact on the performance of the index.

He added this ETF is a bet on Canadian licensed producers (LPs), which represent 74 percent of the fund. Brochstein conceded why investors see interest in this particular ETF:

While I continue to believe that most investors can likely do better than HMMJ by picking a few large Canadian LPs, thus avoiding the 0.75 [percent] management fee as well as exposure to a few names that don’t really make sense, I can see the appeal to those investing smaller amounts of money but who want diversification.

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Editor’s Note: This story was updated to reflect the market closure data for the Horizons Marijuana Life Sciences Index ETF.

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Beleave, HIKU Brands, and Isodiol International are clients of the Investing News Network. This article is not paid-for content.