Update (Jan 22nd, 2021): Horizons has confirmed that there is no 15% performance fee, contrary to that present in the ETF Facts sheet filed via Sedar. The annual management fee is set at 0.85%.
In a press release, Horizons confirmed: “PSYK will close the initial offering of units to its designated broker at the close of business on January 26, 2021, prior to its initial listing of units on NEO on January 27, 2021.”
A first look at the companies to be included in Horizons’ Psychedelics ETF
As 2020 came to a close, we broke the news of the first psychedelics ETF, which was slated to commence trading in January 2021. Today, we are breaking the news that North American Psychedelics Index has been published.
The high-level purpose of the ETF is to “invest in, and indirectly derive revenues from, companies in the psychedelics industry engaged in legal activities involving psychedelic drugs and substances.”
The question on the minds of many investors has been simple, which psychedelics companies will be included in the ETF? Today, we are pleased to share the answer to that question…
Which Companies are Included in the First Psychedelics ETF?
Given the Index’s requirements (see below), the following companies are included in the current North American Psychedelics Index:
- Johnson & Johnson (JNJ)
- AbbVie Inc (ABBV)
- COMPASS Pathways (CMPS)
- Field Trip Health (FTRP)
- MindMed (MMED)
- Greenbrook TMS Inc (GTMS)
- Entheon Biomedical (ENBI)
- Seelos Therapeutics (SEEL)
- Cybin (CYBN)
- Mind Cure Health (MCUR)
- Havn Life Sciences (HAVN)
- Numinus (NUMI)
- Mydecine Innovations (MYCO)
- Nova Mentis (NOVA)
- Psyched Wellness (PSYC)
- Revive Therapeutics (RVV)
- Red Light Holland (TRIP)
The Index will be rebalanced according to a number of factors, some of which are described below.
The North American Psychedelics Index, Explained
Like many ETFs, PSYK will track an underlying index. As such, the way in which this index is structured and adjusted is of direct importance to the composition of the ETF.
In this case, the underlying index is the North American Psychedelic Stock Index, provided by German-based index provider Solactive.
The Index is passive, in that it weights constituent companies according to their market cap, with a number of conditions that include:
- Index components are weighted according to their Float Market Capitalization subject to a cap of 10% for any single security.
- The weight of any pharmaceutical company with a total market cap. of $5b or greater, whose activity in psychedelics represents <25% of their total revenue, is capped at 5%.
- On aggregate, all such pharmaceutical companies described above are capped at 20%.
This prevents the Index becoming dominated by big pharma players, and by the largest marketcap psychedelics companies (e.g., CMPS, MMED).
For inclusion, companies must meet the following requirements:
- Minimum float market cap of CAD $25m
- Minimum 3-month average daily traded value of at least CAD $125,000
- Minimum share price of CAD $0.10
When Does PSYK Commence Trading?
The ETF is expected to begin trading on January 27th. The ETF will trade on the NEO Exchange under ticker PSYK.
While the original listing is set to be in CAD, Horizons may also list on a U.S. exchange under the ticker symbol PSYK.U.
Horizons is the fourth-largest ETF provider in Canada, with more than CAD$16 billion in assets under management across 93 ETFs. It brought the first cannabis industry ETF (TSE:HMMJ) to market in 2017. Now, Horizons is providing investors with the first Psychedelic Stock Index ETF.