The financial services industry can be incredibly creative when it comes to money. And one of their favorites is to launch products around the hot new trends – whether they are actually useful isn’t really important.
And marijuana legalization is definitely one of the hot new trends – especially in Canada where a marijuana ETF just came out on the Toronto stock exchange. But as you might imagine for such a young industry, this thing has problems as an actual investment.
The most glaring of these issues is that the ETF only holds fourteen stocks (three of which are biotech firms that happen to create synthetic THC). Fourteen stocks does not an asset class make. It doesn’t even make a sector.
This ETF is really a way to bet on Canadian government policy toward marijuana. It might be great for speculation, but it certainly isn’t even close to useful for actual investment.
As we’ve discussed before there are all sorts of crazy indexes out there (I’m looking at you, Dow Jones 2008 Summer Games Index). Just because someone can name and define something doesn’t mean there’s anything there – even if the returns look great.
McLean Asset Management Corporation (MAMC) is a SEC registered investment adviser. The content of this publication reflects the views of McLean Asset Management Corporation (MAMC) and sources deemed by MAMC to be reliable. There are many different interpretations of investment statistics and many different ideas about how to best use them. Past performance is not indicative of future performance. The information provided is for educational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy or sell securities. There are no warranties, expressed or implied, as to accuracy, completeness, or results obtained from any information on this presentation. Indexes are not available for direct investment. All investments involve risk.
The information throughout this presentation, whether stock quotes, charts, articles, or any other statements regarding market or other financial information, is obtained from sources which we, and our suppliers believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in the transmission there of to the user. MAMC only transacts business in states where it is properly registered, or excluded or exempted from registration requirements. It does not provide tax, legal, or accounting advice. The information contained in this presentation does not take into account your particular investment objectives, financial situation, or needs, and you should, in considering this material, discuss your individual circumstances with professionals in those areas before making any decisions.