JThe S&P/MX International Cannabis Index is up 61% year-to-date, underscoring the strength of the cannabis sector. The Global X Cannabis ETF (POTX) which is up 80% since the start of the year.
POTX seeks to provide investment results that generally correspond to the price and return performance, before fees and expenses, of the Cannabis Index. The fund invests at least 80% of its total assets in the securities of the underlying index and in American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) based on the securities of the underlying index.
The Underlying Index is designed to provide exposure to publicly traded companies that are active in the cannabis industry, as defined by Solactive AG, the provider of the Underlying Index. With a spend rate of 0.50%, POTX is 15 basis points lower than the category average.
Overall, POTX gives investors access to:
- High growth potential: POTX provides investors with access to a basket of high growth potential companies from across the cannabis industry.
- A stress-free approach: The composition of POTX transcends traditional sector, industry and geographic classifications by following an emerging theme.
- Efficiency of ETFs: In a single trade, POTX offers targeted access to dozens of businesses with significant exposure to the cannabis theme.
- Performance: The fund outperforms the S&P/MX International Cannabis Index by around 20%.
No signs of slowing down for thematic ETFs
As the ETF space continues to grow (currently over $7 trillion globally as of Feb 19, according to Statista), thematic funds continue to grow with it. Funds like POTX are a big part of that.
“The allocation to ETFs – or exchange-traded funds – has continued to rise this year despite the volatility caused by the pandemic. And the best performing funds are dominated by one theme: the weed,” said a CNBC Article Noted. “In fact, marijuana-focused ETFs make up half of the top 10 ETFs in the first two months of 2021 according to data provided by Refinitiv.”
“ETFs are investment funds that can be easily traded throughout the day on exchanges. They attracted a record investment of $7.99 trillion globally at the end of 2020, according to ETFGI design office,“adds the article. “And investor interest in ETFs shows no signs of slowing down. A survey by US private bank Brown Brothers Harriman, released on Monday, found that 72% of global financial advisers, institutional investors and fund managers plan to increase their ETF allocation over the next 12 months. And eight out of 10 investors surveyed plan to increase their exposure to thematic ETFs.”
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