World’s first marijuana ETF reaches $1 billion AUM

Horizons ETFs Management (Canada) Inc.’s marijuana life sciences index exchange-traded fund has reached $1 billion in assets under management.

Indicated by the ticker symbol HMMJ, the fund is the first and largest of its kind to offer direct exposure to marijuana-related North American-listed companies as a cohesive index, according to a news release. Since it was launched 16 months ago, the fund has returned 78.5 per cent on an annualized basis.

Read: Is it high time for institutional investors to consider the cannabis sector?

“When we launched HMMJ in April of 2017, we knew there would be significant interest in a marijuana companies ETF, given the tremendous potential of the sector,” said Steve Hawkins, president and chief executive officer of Horizons, in a press release. “HMMJ’s growth has far exceeded our expectations as investors have strongly supported the sector in anticipation of Canada’s upcoming recreational marijuana legalization.”

Alongside exposure to direct cannabis producers, the fund also holds many companies with tangential links to the sector, including biopharmaceuticals, medical manufacturing, distribution, bio-products and other ancillary businesses.

“One of the key drivers of HMMJ’s rapid asset growth speaks to the investor demand and desire for a diversified portfolio of cannabis companies versus buying individual stocks,” said Hawkins. “While there are clearly leaders in the marijuana equity sector, nobody knows for sure which companies will truly be successful over the long term or even be swallowed up.

“HMMJ’s one-ticket, diversified investment solution has become very popular with investors looking to get broader exposure to the sector while mitigating single-stock risk without being subject to any active management bias.”

Read: Canadians’ cannabis spending increases 1.2% in second quarter