‘New’ Fund Soars To Record High: Is Cannabis The New Bitcoin?


Talk about a fresh start for the new year. A cannabis-focused exchange traded fund is soaring as more states legalize marijuana sales.

[ibd-display-video id=3052401 width=50 float=left autostart=true] But it’s not a newly minted ETF. ETFMG Alternative Harvest ( MJX ) has run up 16.4% so far this year through Jan. 9, according to Morningstar Direct, far ahead of the S&P 500’s 2.8% gain. The fund hit a new intraday high Tuesday. It perked up with a 3% jump Dec. 26, when MJX began trading with a new objective and ticker, and has soared 30% since then.

Before that date, MJX traded under the ticker LARE and was the Tierra XP Latin America Real Estate ETF. In late October, ETFMG notified investors it would change the Latin America index to Prime Alternative Harvest Index and track marijuana stocks instead.

MJX now boasts $317.6 million in assets and owns Canadian pot stocks such as Cronos Group, Canopy Growth and Aurora Cannabis. It also has positions in medical companies such as GW Pharmaceuticals ( GWPH ), a U.K.-based developer of marijuana-derived drugs to treat cancer and other diseases, and Insys Therapeutics ( INSY ), whose products target cancer pain.

A handful of tobacco makers including British American Tobacco, Japan Tobacco and Altria Group ( MO ) round out the 30 holdings in the portfolio.

Since the fund began trading under the new objective and ticker two weeks ago, there isn’t really a track record. It’s currently extended from any buy point . MJX carries a 0.75% expense ratio.

Bitcoin Investment Trust ( GBTC ), which skyrocketed last year, has had a much tamer start this year. It’s up 3%. The cryptocurrency it aims to track continues to make daily headlines. So far this year, South Korea has announced a probe  into banks to curb speculation, JPMorgan CEO Jamie Dimon said he regrets comments last year during which he called Bitcoin a fraud , and billionaire investor Warren Buffett told CNBC Wednesday he has no interest in cryptocurrencies.

IBD’S TAKE: Even as investors in the cannabis industry try to get in on the ground floor, investing in the space in the U.S. can be tricky.

AdvisorShares Vice ETF (ACT) isn’t a pure-play marijuana fund. As the name implies, it’s a broader theme. As of Dec. 13, cannabis stocks accounted for 20% of its portfolio, while alcohol and tobacco made up the remaining 49% and 32%, respectively.

ACT has attracted $15.1 million since its Dec. 12 launch. Its top holdings include alcoholic beverage producer Constellation Brands (STZ), drugmaker AbbVie (ABBV) and agricultural chemical firm Scotts Miracle-Gro (SMG).

Constellation Brands rose more than 2% Tuesday on news related to its work with Canopy Growth Corp., a Canadian medical marijuana company, to develop nonalcoholic cannabis drinks . The beer and wine giant in October announced it would take a 9.9% stake in Canopy.

ACT is flat this year and bears a 0.75% expense ratio.

Tuesday’s picks, iShares PHLX Semiconductor (SOXX) and SPDR S&P Semiconductor (XSD), remain just below their respective buy points.


Pot Stock Plays Fall, But Here’s Why Jeff Sessions May Not Matter Much

Stock Market Closes At Record High; Is Bitcoin No Longer A Fraud?

Stocks Move As Nvidia, Tesla Drive Techs; Bitcoin, Ripple Dive

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Original Source