New Psychedelics ETF Is Another Sector Milestone

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A new psychedelic stock index ETF adds one more investment driver for investors as they look ahead to 2021

On January 15th, Horizon ETFs Management is expected to launch the first psychedelic stock ETF for psychedelics investors: the Horizons Psychedelic Stock Index ETF (CAN: PSYK). It will mark yet another milestone for this emerging sector.

The creation of a psychedelics ETF: signals two things to the market.

  1. There is now a large enough critical mass of these companies to be able to create a psychedelic stock ETF.
  2. There is enough investor demand for companies in this sector to justify the creation of such a fund.

The Horizons ETF will be a passive fund. This means that it will broadly represent the leading public companies.

A very successful year for psychedelic stocks

Last year was the first year of trading for public psychedelic drug companies. As Psychedelic Stock Watch noted with our 2020 wrap up, it was a very successful first year for this new industry. The Year In Review For Psychedelic Drug Stocks: 2020

Among the highlights for investors, we focused on three factors.

  • Multi-bagger returns for several companies
  • Large and rising capital flows into the industry
  • Very favorable media coverage and public opinion

Investors are making money on these companies. They like the sector. And we see that demonstrated by not only the massive capital flows into these companies but also via very heavy trading volume for several of these stocks.

Framed in this manner, psychedelic drug stocks are an obvious vehicle for a new investor ETF.

The fund itself becomes another driver for psychedelic drug stocks. The ETF will provide increased direct demand for the companies. It will indirectly boost demand for these stocks by bringing more visibility (and credibility) to the sector.

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Disclosure:

The writer holds shares in MindMed Inc, Numinus Wellness and Mind Cure Health. Mind Cure Health is a client of Psychedelic Stock Watch.

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