As the Canadian cannabis sector heats up, so is a battle between passive and active exchange-traded funds who each claim to have the better strategy for investors looking to make money in the sizzling sector.
The Redwood Marijuana Opportunities Fund, the world’s first actively managed marijuana ETF, began trading Thursday in Toronto under the ticker MJJ, losing 2 per cent to $19.54 at 10:23 a.m. The strategy allows for active buying, selling and shorting of pot stocks with a focus on growth and relative valuation, said Greg Taylor, who manages the fund for Redwood Asset Management.
“There’s a lot of volatility and there’s a lot of people that are just buying the mania and not doing their research,” Taylor said in a phone interview. “I think active strategies can be more reactive, can move around, can be more dynamically managed to take advantage of some of the big flows.”