Where Are the Marijuana Index Funds?
April 26th, 2018
Most people are at least vaguely familiar with mutual funds: they know them as conservative investments that allow the common investor to diversify their money within the market simply by buying into the fund instead of purchasing a single security such as Treasury bonds or individual stocks. One thing that many folks don’t know, however, is that different mutual funds are set up with different objectives and underlying investments.
An Index Fund, for example, is designed to match / track the movement of an underlying index. For example, an S&P 500 Index Fund would be structured to provide performance that mimics the S&P 500 index as closely as possible. Because of the structure of mutual funds, it is possible for Fund Managers to buy and sell securities that are held as the underlying value behind the mutual fund – this means that even though a mutual fund is pegged to the S&P, it doesn’t need to include underlying securities listed on the S&P, all it needs to do is accurately track the performance of the index. This distinction is important when doing research about small volume/ narrow-based index pegged funds.
Though finding index funds pegged to the S&P, Dow Averages or even Wilshire Index are regular in the investment world, finding lesser known index funds can yield significant return if you know where to look.
Prime example of an unrealized opportunity that you’ll kick yourself over would be failing to invest in funds that track the Marijuana Index before the Federal government addresses cannabis legalization. There is steady upward pressure from a continually growing majority of US citizens for the government to legalize cannabis, and if it happens, it stands to give the cannabis industry and market segment the boost that it has needed since the first uncertainty about the future when Jeff Sessions was made AG.
One example of an index fund that both trades electronically and is pegged to the marijuana index is the Horizons Medical Marijuana Life Sciences ETF (HMMJ). While most of their holdings are in pot producing companies and medical dispensaries, a few familiar, blue chip names made the cut including Scott’s Miracle Grow (SMG) and GW Pharmaceuticals (GWPH). While these big name companies provide stability to the portfolio, they also have ancillary ties to the cannabis industry. GW develops cannabis-based and synthetic cannabinoid medication. Scott’s Miracle Grow is a trusted name in outdoor gardening. As the cannabis industry busts and booms, these big chip stocks are sure to move in conjunction.
Advantages of investing in an index fund versus individual stocks are bountiful, especially for the everyday investor. First, an index fund is going to be automatically diversified by the fund manager. A single share of a mutual fund will represent a basket of underlying securities that’s put together and by the fund manager. Another major advantage of an index fund versus single stocks is that they are managed. The Fund Manager not only selects the stocks and securities to be included in the underlying index fund’s basket, they can adjust or add as needed, too. This means that your portfolio is being managed by a professional. A third and very important advantage that index funds have over common stock is that many investment companies will offer breakpoints where the cost of investing goes down at higher dollar figures invested in the same fund family. That means that if you find a “marijuana index fund” at an investment firm where you have other accounts, you may be entitled to a lower share price simple for having money in other accounts with the same investment firm!
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
Follow Us on Social Media
About CFN Media Group
CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.
Disclaimer: Matters discussed on this website contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time-to-time have a position in the securities mentioned herein and will increase or decrease such positions without notice. The Information contains forward-looking statements, i.e. statements or discussions that constitute predictions, expectations, beliefs, plans, estimates, or projections as indicated by such words as "expects", "will", "anticipates", and "estimates"; therefore, you should proceed with extreme caution in relying upon such statements and conduct a full investigation of the Information and the Profiled Issuer as well as any such forward-looking statements. Any forward looking statements we make in the Information are limited to the time period in which they are made, and we do not undertake to update forward looking statements that may change at any time; The Information is presented only as a brief "snapshot" of the Profiled Issuer and should only be used, at most, and if at all, as a starting point for you to conduct a thorough investigation of the Profiled Issuer and its securities and to consult your financial, legal or other adviser(s) and avail yourself of the filings and information that may be accessed at www.sec.gov, www.pinksheets.com, www.otcmarkets.com or other electronic sources, including: (a) reviewing SEC periodic reports (Forms 10-Q and 10-K), reports of material events (Form 8-K), insider reports (Forms 3, 4, 5 and Schedule 13D); (b) reviewing Information and Disclosure Statements and unaudited financial reports filed with the Pink Sheets or www.otcmarkets.com; (c) obtaining and reviewing publicly available information contained in commonlyknown search engines such as Google; and (d) consulting investment guides at www.sec.gov and www.finra.com. You should always be cognizant that the Profiled Issuers may not be current in their reporting obligations with the SEC and OTCMarkets and/or have negative signs at www.otcmarkets.com (See section below titled "Risks Related to the Profiled Issuers, which provides additional information pertaining thereto). For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity-based compensation in the companies it writes about, or a combination of the two. For full disclosure, please visit: https://www.cannabisfn.com/legal-disclaimer/. A short time after we acquire the securities of the foregoing company, we may publish the (favorable) information about the issuer referenced above advising others, including you, to purchase; and while doing so, we may sell the securities we acquired. In addition, a third-party shareholder compensating us may sell his or her shares of the issuer while we are publishing favorable information about the issuer. Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.cannabisfn.com/legal-disclaimer/.