This ETF might bring “high” returns.
MJX, an ETF focused on the cannabis industry, made its debut on NYSE Arca on December 26. The fund previously planned to make its debut as the “Alternative Agroscience ETF” and claims to be “one of the first of its kind." It intends to mirror returns from the Prime Alternative Harvest Index. According to the fund’s managers, the index “tracks companies likely to benefit from the increasing global acceptance of various uses of the cannabis plant.” The fund was earlier targeted at the real estate market in Latin America. (See also: NYSE Gets Its First Weed Fund.)
ETF Managers Group LLC is behind MJX. “As an ETF issuer we are excited about opportunities for innovation, the chance to give investors exposure to new markets and doing our part to impact the continued evolution of the ETF industry by meeting the appetite of investors interest,” said Sam Masucci, founder and CEO of the company. (See also: Top 4 Marijuana Stocks To Watch.)
MJX has 31 holdings, with more than 80% focused on the healthcare and consumer staples sector within the cannabis industry. The top three holdings in the ETF are Canadian. Its largest holding is Cronos Group, a supplier of cannabis to medical institutions. CannTrust Holdings, another company aimed at the medical cannabis industry, and Canopy Growth Corp., a cannabis producer and distributor, are the other two holdings.
The MJX fund has $5.7 million in assets and an expense ratio of 0.75% and its managers plan to rebalance it on a quarterly basis. Across the pond, the Horizon Marijuana Life Sciences Index ETF also tracks businesses within the marijuana industry. (See also: 3 Marijuana Cryptocurrencies, Including Dennis Rodman's Pick.)