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Part of cannabis and investing

Canada’s largest marijuana ETF is on a roll – but it’s not attracting cash like it used to.

The Horizons Marijuana Life Sciences ETF (HMMJ), the first exchange-traded fund to track the cannabis industry, surged 32 per cent in August, just shy of its best monthly price gain to date. The fund saw a net inflow of $12-million for the month, according to Bloomberg data, and only swung into positive territory thanks to a $23-million infusion on the final two days of August.

The subdued inflow marked a significant departure from January, when the ETF brought in nearly $250-million as many marijuana stocks were scaling new heights, and comes as other Canadian cannabis funds struggle to attract investor cash.

Story continues below advertisement

Several cannabis ETFs have launched in Canada this year, among them two actively-managed funds, from Evolve ETFs and Purpose Investments.

Since launch, the Purpose fund has recorded a net inflow of $8-million, and the Evolve fund a net inflow of $4.8-million, according to Bloomberg. By contrast, HMMJ has brought in a net $389-million this year, making it one of the most popular Canadian-listed equity ETFs over that span, despite its recent slowdown.

Biggest doesn’t mean best returns, however. Since Feb. 12, the earliest date at which all three were on the market, the Purpose fund has seen a total return of 23 per cent, as of Friday’s close. The Horizons and Evolve funds are up 17 per cent and 4 per cent, respectively.

Meanwhile, another Horizons marijuana ETF (HMJR) – this one focusing on small-cap companies in the sector – is the clear laggard on both metrics. Since its mid-February launch, HMJR has dropped 15 per cent, as of Friday’s close, and was down 37 per cent three weeks ago. It has also recorded a slight net outflow since launch, according to Bloomberg.

Coming soon: Cannabis Professional, an authoritative e-mail newsletter tailored specifically for professionals in the rapidly evolving cannabis industry. Sign up now to learn more.

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