Top 3 Cannabis ETFs to Watch in 2021
Legal cannabis has been slowly growing in the United States since the campaign to legalize marijuana for medical and recreational purposes. In 2018, the cannabis industry was valued at $12 billion US dollars. It is now expected to be worth between $104 billion by 2024. These numbers are quite extraordinary for such a young industry.
As a result of these extraordinary numbers, many investors are looking for a way to capitalize on the growth of the industry. For many investors, the answer lies in cannabis ETFs. ETFs or exchange-traded funds enable investors to gain exposure to the cannabis industry, with less risk than they would if they invested in one stand-alone stock. As a result, many investors, especially retail investors, prefer ETFs to singular stocks, especially in an industry as volatile as the cannabis industry. What are the top 3 Cannabis Industry ETFs to watch in 2021?
To aid your efforts to add quality cannabis stock investments to your portfolio, we have compiled a list of the top three performing cannabis ETFs so far in 2021. As a first-time cannabis investor, these should be the first ETFs you consider.
It’s worth noting that as the economy re-opens following the pandemic, an increase of consumer spending is pushing the cost of many goods and services higher. The experts at Bankrate created a guide that provides advice on protecting your finances from inflation by investing in Exchange Traded Funds (ETFs) and owning stock in companies that benefit from increasing prices. It includes an explanation on inflation, how ETFs can help protect your finances, and the best index funds to invest in.
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The first ETF on our list is MSOS. The main reason it’s in first place on our list is that it is the only actively managed ETF dedicated solely to US cannabis exposure. The US cannabis industry is the largest one globally, with cannabis sales in 2020 reaching seven billion US dollars.
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The other benefit of MSOS is that it has very well-diversified holdings. Its holdings include growers, dispensaries, pharmaceutical companies and biotech firms focused on marijuana use. If the analysts are right about the future of the cannabis industry in the United States, and the legalization trend continues across the country, then this is the cannabis ETF to watch for in 2021.
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THCX offers pure-play exposure to the cannabis industry with a basket of roughly 29 stocks. Created in July 2019 with a primary focus on Canadian cannabis stocks, it boasts a 9.6% growth rate over one year. This growth rate doesn’t seem impressive on the surface but combined with a 6.35% annual dividend yield; then it is no surprise why this cannabis ETF is on our list.
This cannabis ETF follows a blended strategy, investing in both growth and value stocks. It is a passively managed fund that tracks the Innovative Labs Cannabis Index. THCX rebalances monthly and has an annual expense ratio of 0.7%.
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TOKE is an actively-managed portfolio with the lowest expense ratio on this list, currently at 0.42%. With a modest $39 million in assets, it flies under the radar. However, the main reason it is on this list is because of Cambria’s founder and CEO, Meb Faber.
Famous for value investing, Meb Faber’s interest in cannabis indicates to many industry players that it is still tremendously undervalued. It is, therefore, no surprise that TOKE has a 65% one-year return rate – making it one of the top 3 cannabis ETFs to watch in 2021.
And there you have it. These are our 3 top cannabis ETFs to watch in 2021. But you don’t have to take our word for it. Research these ETFs for yourself and confirm that they are worthy of your investment in 2021. Good luck!
Top 3 Cannabis ETFs to Watch in 2021
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