ETF Managers Group has launched its third marijuana fund, seeking this time to produce doubled returns on companies with exposure to the cannabusiness world.
The ETFMG 2X Daily Alternative Harvest ETF (MJXL) began trading on the NYSE Arca Wednesday morning. It’s the leveraged sibling fund to the $1.6 billion ETFMG Alternative Harvest ETF (MJ), which tracks the Prime Alternative Harvest Index.
The underlying index primarily targets companies that generate at least half of their revenues from cannabis-related activity, although that definition is stretched to pharmaceutical companies that use cannabinoids in medical research, agricultural companies that produce plant cultivation equipment and tobacco manufacturers.
MJXL is currently the only leveraged ETF focusing on cannabis, although Bank of Montreal offers a competing thematic exchange-traded note through its MicroSectors Cannabis 2x Leveraged ETN (MJO). Both MJXL and MJO carry expense ratios of 0.95%.
ETFMG was the first to issue a cannabis-focused fund in the U.S. when it retrofitted the Tierra XP Latin American Real Estate ETF (LARE) into the ETFMG Alternative Harvest ETF (MJ) in early 2018. That fund is currently the largest cannabis fund in the U.S.
ETFMG also offers the actively managed ETFMG U.S. Alternative Harvest ETF (MJUS), which launched in May of this year and focuses specifically on the U.S.