much lower than mutual funds and far lower than paying $6.95 a trade (or whatever your trading platform charges).
The third really important factor is risk (see unintentional scare tactics three paragraphs up). An ETF is a portfolio of stocks rolled up into one, essentially. Diversification is typically built-in, and although the cannabis sector ETF remain focused on this sector solely, the mix of companies held does bring some diversification through large versus small cap, ancillary, global presence (as opposed to strictly Canadian-based companies) and potential new entrants (tobacco, beverage, and pharma mainly). Generally speaking, the ETF is protected against sharp dips and declines, as one stock could be underperforming while others propping them up and trending higher than average. On the flipside, gains in an ETF are typically not as great as one would have realized if each stock was purchased individually. Here lies in the inherent dilemma. Depending on your goals, holding an ETF may or may not be the investment for you.
So what cannabis-sector ETFs are out there? Here is a brief overview of each:
HMMJ – Horizons Marijuana Life Sciences Index ETF
The first, and proudly a former cover of CannaInvestor Magazine Canada, dates back to April 2017 and holds net assets of over a billion dollars, making it the biggest of the select few. Currently at the high of just under $24, its top holdings are as shown in the piechart, and include Canopy Growth Corporation (TSE:WEED; NYSE:CGC; FRA:11L1), Aphria Incorporated (TSE:APH; OTC:APHQF; FRA:10E), Tilray Incorporated (NASDAQ:TLRY), and Aurora Cannabis Incorporated (TSE:ACB; OTC:ACBFF; FRA:21P), among others.
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