Marijuana ETF Outperforms In Q1: 6 Stocks Leading The Rally

The cannabis-related ETFMG Alternative Harvest ETF (MJ - Free Report) topped the list of the best performing ETFs of first-quarter 2019, with impressive returns of nearly 50%. It also attracted $370.3 million in capital in the quarter.

The surge was driven by easing of rules and regulations on the once highly guarded drug — marijuana — for recreational and medical usage. In fact, the popularity has been rising since Canada legalized recreational cannabis last year and become the second country in the world to do so on a national level. Additionally, a number of states in United States have also joined the race of marijuana legalization. The White House, Congress and U.S. regulators have also softened their stance on the drug’s legalization. All these developments have injected strong optimism into the emerging marijuana industry, spurring deal activities.

As a number of alcoholic beverage companies are producing huge opportunities by investing or partnering with cannabis producers, the tremendous success of the pot industry is showing no signs of slowdown resulting in a strong rally in the marijuana ETF.

Let’s take a closer look at the fundamentals of MJ.

MJ in Focus

This is the first and only ETF focusing on the cannabis/marijuana industry. It tracks the Prime Alternative Harvest Index, designed to measure the performance of companies within the cannabis ecosystem, benefiting from global medicinal and recreational cannabis legalization initiatives. The fund holds 37 securities in its basket with higher concentration on the top firms. Canadian firms make up 62% of the portfolio, while American firms comprise 24.2%. The ETF has AUM of $1.2 billion and trades in a solid volume of around 945,000 shares. It charges 75 basis points in annual fees.

Though most of the stocks in the fund’s portfolio delivered strong returns, a few were the real stars, soaring more than 60% in the first quarter. Below we have highlighted those six best-performing stocks in the ETF with their respective positions in the fund’s basket:

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