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HANetf Announces Changes to the Index Composition of The Medical Cannabis and Wellness UCITS ETF | CBDX

  • Namaste Technologies removed from portfolio with immediate effect
  • CBDX targets companies involved in the legal medical cannabis, CBD and hemp industries
  • Full rebalance to occur at the end of February

 

London, February 2020: HANetf, Europe’s first independent ‘white label’ UCITS ETF issuer has announced a change to the composition of CBDX – The Medical Cannabis and Wellness UCITS ETF. The ETF was launched in January 2020 on XETRA and London Stock Exchange with Purpose Investments as sponsor. 

The fund tracks a rules-based Medical Cannabis and Wellness Equity Index from Solactive, consisting of publicly listed companies conducting legal business activities across nine thematic sub-sectors in the medical cannabis, hemp and CBD industries. The methodology uses a rigorous and multi-tiered screening process to identify and exclude companies that are involved in the adult-use Cannabis market.

The ongoing quantitative and qualitative screening process has identified that Namaste Technologies Inc (TSXV:N) no longer meets the strict criteria for inclusion following its announcement that Choklat Inc. ("Choklat") an Alberta-based craft chocolate manufacturer and chocolatier in which Namaste holds a 49% equity position, has received a processing license from Health Canada to produce a line of cannabis-infused chocolate bars, drink mixes and infused sugar.

The sale of cannabis-infused edible products (which will be sold by their subsidiary starting March 2020) will generate revenue in the adult-use cannabis market, outside the scope of the index methodology and the removal of Namaste represents a proactive move to keep the index in line with the calculation methodology.

This deletion reinforces one of the major benefits of CBDX provides to European investors - comfort that the companies held in the index remain legal as evidenced by the removal of Namaste expediently via a screening process. Some European jurisdictions do not allow recreational use of cannabis at this point in time. Hence these controls help the fund remain in compliance with its objective.

Nawan Butt, Portfolio Manager at Purpose Investments, commented: “Namaste’s entry into the crowded recreational market is contradictory with the index’s overall thesis in identifying long term value trends in the medical and wellness space. Although we believe this could be positive for those focused on near term monetization of the Canadian adult use cannabis industry, the long-term value is still within the scientific medical approach.”

Ignatius Faisal, Director of Product Management at HANetf said: “This proactive deletion highlights the ongoing qualitative monitoring of the underlying constituents that we perform to ensure all constituents are complying with the rules of our medical and wellness cannabis index.”

When you trade ETCs, your capital is at risk.  For professional investors only. This content is issued by HANetf Limited, an appointed representative of Mirabella Advisers LLP, which is authorised and regulated by the Financial Conduct Authority. 

CBDX Product Information: 

EXCHANGE BB CODE RIC ISIN SEDOL CCY INCOME
 London Stock Exchange CBDX CBDX.L IE00BG5J1M21 BGSXSL9 USD Acc
London Stock Exchange CBDP CBDP.L IE00BG5J1M21 BGSXQX7 GBP Acc
XETRA CBSX CBSX.DE DE000A2PPQ08  BJBL4D5 EUR Acc

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