The Brand-New Marijuana ETF Will Become the 5th to List in the U.S. This Year
The cannabis fueled party on Wall Street shows no signs of slowing down as yet another U.S. listed cannabis ETF files the necessary SEC paperwork to join the action.
According to an SEC Form 497K filed on September 3, 2019, the Global X Cannabis ETF (NASDAQ: POTX) is getting ready to begin trading shortly.
Global X Cannabis ETF will become the 5th cannabis-focused ETF to list in the United States this year and will trade alongside ETFMG Alternative Harvest ETF (NYSE: MJ), AdvisorShares Pure Cannabis ETF (NYSE: YOLO), The Cannabis ETF (NYSE: THCX) and Cambria Cannabis ETF (NYSE: TOKE). POTX will be the sole ETF listed on the NASDAQ. The other four ETFs currently trade on the New York Stock Exchange (NYSE).
Global X is a sponsor of exchange-traded funds (ETFs) and is renowned for its Thematic Growth, Income, and International Access ETFs. Global X offers a product lineup that includes more than 60 ETFs.
The Global X Cannabis ETF will seek to provide investment results that correspond generally to the performance of the underlying cannabis index.
As stated in Global X Cannabis ETF’s 2019 Summary Prospectus, the fund will invest in stocks and American Depositary Receipts (ADRs) of companies that derive at least 50% of its revenue, operating income or assets from the cannabis industry. Companies involved in any point of the cannabis value chain that expects to one day earn 50% or more of their revenue from cannabis would qualify.
“In order to be eligible for inclusion in the Underlying Index, a company is considered by the Index Provider to be a Marijuana Company if it derives at least 50% of its revenue, operating income, or assets from the marijuana industry value chain.” – Global X Cannabis ETF SEC filing.
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Included in the cannabis value chain are companies in the cannabis industry that provide cultivation, extraction and processing, retail sales, pharmaceuticals, ancillary products, real estate, consulting and financial services.
“If a company grows, produces, distributes, or sells marijuana, products derived from marijuana or synthetic versions of marijuana, it cannot perform any such activity in any country, state, province, locality or other political subdivision where this activity is illegal under applicable law,” – Global X Cannabis ETF SEC filing.
POTX will have an expense ratio of 0.50% making their cannabis-focused ETF the second cheapest on the street trailing only the Cambria Cannabis ETF. The fund will be managed on a day-to-day basis by portfolio managers Chang Kim (CFA), Nam To (CFA), Wayne Xie and Kimberly Chan.
Canadian, American and Australian companies that meet its minimum size and liquidity requirements are eligible for inclusion in the ETFs portfolio.
As of now, there is no official date listed by Global X for the trading of POTX to begin. I reached out to Global X ETFs for an update on when they expect trading to commence. I will update this article once I receive that information.
Full List of U.S. Listed Cannabis ETFs
- ETFMG Alternative Harvest ETF (NYSE: MJ) | Expense Ratio: 0.75% | Fund Website
- AdvisorShares Pure Cannabis ETF (NYSE: YOLO) | Expense Ratio: 0.74% | Fund Website
- The Cannabis ETF (NYSE: THCX) | Expense Ratio: 0.70% | Fund Website
- Cambria Cannabis ETF (NYSE: TOKE) | Expense Ratio: 0.42% | Fund Website
- Global X Cannabis ETF (NASDAQ: POTX) | Expense Ratio: 0.50% | Fund Website
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