Three of the top cannabis ETFs (exchange-traded funds) joined this week's Benzinga Cannabis Hour.
Matt Markiewicz, the New York-based managing director of Innovation Shares, called into the show first representing THCX, a cannabis ETF that launched on NYSE last July. The 11-year ETF veteran gave Benzinga's Javier Hasse and Patrick Lane insight on what it means to run a fund that's "actively styled" yet passive.
"One of the things that I learned was, most investors — particularly financial advisors and registered investment advisors — don't really love the idea of actively managed ETFs," he said.
Now, it's not a one-size-fits all. It's a lot of "giving investors what they know," Markiewicz explained, but it also depends on strategy.
"Overwhelmingly, the appetite was for a passively managed product," he added.
Markiewicz also noted how stocks in the cannabis space tend to be among the most volatile. Still, cannabis ETFs have emerged as a practical possibility to easily diversify an investment and reduce the natural risk of the stock market.
Next up on the show were Sam Masucci, CEO and Founder ETF Managers Group; and his colleague Jason Wilson, Cannabis Research & Banking Expert. The pair discussed why now is the right time to be investing in cannabis.
"Companies are moving from narrative to execution," Wilson said. "Now is the time to execute. Do your business or get off the pot. This is what we're seeing: A real focus on execution of business plans, second generation products and there's a lot of catalysts coming out — Covid related, regulatory and otherwise — that are going to put a lot of wind behind the backs of the cannabis industry."
Masucci added: "We are heavily oriented towards millennial, X, Z investors — the reason why is we have some great themes. Obviously MJ is a great theme. Gamer is a great theme. If you just go down the line of the 14 products that we offer, they're all in the sweet spot of what younger investors are looking for."
Last but not least, BZ Cannabis Hour welcomed Dan Ahrens, COO of AdvisorShares. Unlike Markiewicz, Ahrens and his team are "big believers in active management."
"What investors are looking for is performance," he said. "The proof is in the pudding."
AdvisoreShares, which has 16 ETFs, launched the YOLO cannabis fund in April 2019. And it just turned negative yesterday.
"Year-to-date [YOLO] is down, through yesterday, 0.4 percent," he said, pointing out that other ETFs are down 23 percent or 30 percent this year.
"We're talking about 30 percent performance difference just in this calendar year," Ahrens said. "And we're playing in the same sandbox here — we're taking the same types of risk. We're outperforming... because we're picking the right stocks."
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The Benzinga Cannabis Hour is produced every week and brings together top executives, entrepreneurs, and experts from all corners of the cannabis industry. Each show features three or more guests from a broad spectrum of expertise in cannabis.