Cannabis ETFs continue to increase, even if the growth is slow

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Cannabis ETFs still make a good investment target, but patience is needed

Although the cannabis industry is growing at a steady pace, with multi-billion dollar legal sales globally, corporate stocks in the space have proven to be much more volatile than expected, especially in the last year. In this context, cannabis exchange-traded funds (ETFs) emerge as a practical possibility to easily diversify investment and reduce the natural risk of the stock market. Although ETFs are not yet outstanding, their evolution could be quite important in the future.

Cannabis ETFs allow you to gain exposure to a selection of some of the best-performing cannabis stocks. AdvisorShares Pure Cannabis ETF has been quite relevant in the market, for example. This ETF tracks Canadian and U.S. companies in the health care, real estate, and consumer products sectors and is heavily tilted toward mid-cap companies.

Launched in 2015, Alternative Harvest ETF is one of the largest cannabis funds currently, with about $2 billion in assets under management. It tracks the performance of the Prime Alternative Harvest Index, which was created to allow investors to capitalize on both event-driven news and long-term trends in the cannabis industry.

Amplify Seymour Cannabis ETF is an actively managed cannabis ETF, meaning fund managers buy and sell stocks within the ETF in an effort to provide superior returns to investors. At least 80% of the companies within Amplify Seymour Cannabis ETF are pure cannabis companies that derive 50% or more of their revenues through the cannabis and hemp sectors.

There is no doubt that investors can find ETFs that give them exposure to U.S. operators, for example. While in the past, ETFs focused on the Canadian market, today, investors have many options for gaining exposure to various parts of the market.