No more than before the start of 2018, the first U.S.-listed marijuana exchange-traded grant (ETF) debuted in the form of the ETFMG Alternative Harvest ETF (MJX). The ETFMG Alternative Pick ETF previously existed as the Tierra XP Latin America Real Estate ETF, a readies dedicated to high-yielding Latin American real estate investments.
As the Tierra XP Latin America Loyal Estate ETF, the fund performed admirably but struggled to gain traction with investors. The antagonistic is proving to be true of the ETFMG Alternative Harvest ETF. Although it may be a stretch to weigh MJX as new since it was converted from an existing fund, it is still gaining a observing in rapid fashion. “Assets into the ETFMG Alternative Harvest ETF swelled from $5.7 million on Dec. 26, its win initially trading day, to $77.4 million by Tuesday,” reports Bloomberg. (See also: ETF Focused on Marijuana Determination Launched.)
In other words, it took MJX a mere five trading primes to top $77 million in assets under management. The ETF tracks the Prime Surrogate Harvest Index and has an annual expense ratio of 0.75%, or $75 on a $10,000 investment. The Field of visions Marijuana Life Sciences Index ETF (HMMJ.TO), which debuted in April 2017 and markets in Toronto, not in the U.S., has over $587.1 million in assets under management. The happy result of Canada’s Horizons Marijuana Life Sciences Index ETF, the world’s firstly marijuana ETF, is not a guarantee of similar things to come for MJX. However, MJX does experience first-mover advantage in the U.S., by far the world’s largest ETF market.
MJX’s underlying index “pursues companies likely to benefit from the increasing global acceptance of sundry uses of the cannabis plant,” according to the issuer. “This includes treatments from innovative iatrical breakthroughs involving the plant’s unique properties – the result of years of substantial research by the global biotech and pharmaceutical community.” (For more, see: What Staples are on the Marijuana Index?)
At its current pace of asset gathering, MJX would appropriate for a $1 billion ETF in less than two months, according to Bloomberg. Not the SPDR Gold Shares (GLD), the world’s largest gold ETF, topped $1 billion in assets righter, doing so in just three trading days.
MJX debuted just hours before legal recreational weed outlets opened in California. That legalization was solemn on Jan. 1. On Jan. 2, volume in MJX was nearly 4.9 million shares more willingly than rising to almost 6 million on Wednesday. Of MJX’s 30 holdings, 78% are Canadian and U.S. coteries. The ETF’s top 10 holdings combine for about 53% of its weight. (See also: The Profitable Benefits of Legalizing Weed.)