Renewed interest in psychedelics in both public and scientific spaces has increased investor interest in psychedelic stocks. The psychedelic market is projected to achieve a valuation of $10.7 billion by 2027, and investors are looking to cash in on the industry before it is saturated. However, the industry is still in its infancy and presents a high degree of risk.
As such, psychedelic ETFs or exchange-traded funds that allow investors to buy a bundle of several stocks rather than one have been the focal point of investor interest as they allow diversified risk. Below are a couple of ETFs investors have shown interest in:
Defiance Next Gen Altered Experience ETF (NYSE: PSY) is managed passively based on weighted market cap. It tracks the BITA Medical Psychedelics, Cannabis and Ketamine Index. PSY currently has 21 stocks and manages nearly $8 million; a share was priced at $4.93 as of June 16. Defiance ETF first deployed the psychedelic-focused EFT in May with a focus on licensed companies that deal with psychedelics, cannabis and ketamine.
To be included in this particular index, these companies have to generate at least 50% of their revenue from the production and sale of medical cannabis, psychedelics or ketamine.
Horizon’s Psychedelic Stock Index ETF (NEO: PSYK) trades on the Canadian Stock Index. It tracks North America’s psychedelics market based on a weighted market cap but isn’t as actively managed as PSIL. It manages around $21 million (CAD), has invested in 20 psychedelic stocks and was trading at $2.65 on the Canadian Stock Index as of June 16.
The Advisor Shares Psychedelics ETF (NYSE: PSIL) is actively managed. This EFT boasts stock analysts and dedicated researchers who examine market factors and dive into company financial records to decide which ones to add to PSIL. The ETF has invested capital into 28 psychedelic stocks and currently manages $5.9 million. It was trading at $2.71 as of June 16.
The Elemental Advisors ETF (NYSE: PSYK) is another psychedelics EFT that is managed passively on weighted market cap with one caveat: it uses a proprietary algorithm that processes natural language to choose psychedelic companies. Elemental advisors launched the EFT in February to track the Enhanced Consciousness Index. This index mainly consists of licensed companies that are primarily associated with the research, development and production of psychedelics for medical use.
It is a relatively small EFT compared to the previous three, with just $706,561 in its management. It was trading at $17.14 on the New York Stock Exchange as of June 16.
It might also be wise for you to do your own research about companies such as Delic Holdings Corp. (CSE: DELC) (OTCQB: DELCF) in the portfolios of the different ETFs you are considering so that you can be sure that only the best stocks have been given prominence.
NOTE TO INVESTORS: The latest news and updates relating to Delic Holdings Corp. (CSE: DELC) (OTCQB: DELCF) are available in the company’s newsroom at https://ibn.fm/DELCF
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