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Bearish on Pot Stocks? This ETF Could Be for You!
Marijuana stocks have been performing very poorly this year, and with another round of disappointing quarterly results well under way, things could be about to get even worse for the sector.
With Canopy Growth Corp (TSX:WEED)(NYSE:CGC) capping things off with yet another bad result this week as it records another sizable loss, it’s hard not to want to short the entire sector. The good news is that there’s a way to do that without actually having to take out a short position yourself.
The BetaPro Marijuana Companies Inverse ETF (TSX:HMJI) has nearly doubled since its inception back in May and is still going strong. The one negative about the ETF is that it’s a bit more costly for investors, charging a management fee of 1.45%.
But keeping up with the rapidly changing marijuana industry could make that fee well worth it, especially given how well the fund has performed thus far.
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If nothing else, the BetaPro Marijuana ETF can give cannabis investors a way to hedge their risks and offset potential losses along the way. While the fund may not be suitable for risk-averse investors, neither is the cannabis industry itself.
But if you are bearish on the industry, and right now there’s plenty of reason to be, it could be a good investment option for now.
Marijuana stocks are still expensive buys and with a lot more room to decline in value, the ETF still has the potential to rise further in value. However, given the volatility of pot stocks, this isn’t an investment to just buy and forget.
