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Marijuana and Blockchain: 2018's Hottest New ETFs

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Welcome to Episode #119 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Neena Mishra, Zacks Director of ETF Research and the Editor of the ETF Investor portfolio, joins Tracey to discuss all the new hot ETF and ETN products that have launched in 2018.

It’s still only February, but already the ETF industry has responded to demand by launching ETFs in the hot blockchain category, without actually calling the ETFs “blockchain”, and it used an unusual technique to get a marijuana ETF to the market.

Additionally, if you’ve been wanting to leverage the popular FANG stocks, two new ETN products have launched that are 3x leverage up and 3x leverage down on the stock market’s most popular names.

Two New Blockchain ETFs

Blockchain is THE hottest technology on the Street in 2018. But did you know that many of the big technology names are the way to play it?

You can buy a basket of them through these newly launched ETFs:

1.       Amplify Transformational Data Sharing ETF (BLOK - Free Report) holds 52 positions with many of the big technology names represented. It’s largest holding is Taiwan Semiconductor, at 6.5%, followed by Digital Garage, with 5.4%. It’s net expense ratio is 0.7%.

2.       Reality Shares NASDAQ NexGen Economy ETF (BLCN - Free Report) has 59 holdings and uses the Blockchain Score to pick the portfolio. This ETF holds both technology names but also large banks who may be using the blockchain technology. Among the top 10 holdings are Cisco, Intel, IBM and Microsoft.

Did You Know There’s a Marijuana ETF?

Everyone has been looking for a way to invest in the marijuana industry over the last few years.

But outside of a few American publicly-traded companies that have some business in it, such as Scotts Miracle-Gro, most of the companies have been Canadian. That meant they traded on the Toronto Stock Exchange which wasn’t really available to most American investors.

But in December 2017, an ETF firm suddenly changed a Latin American real estate ETF with just $3 million in assets to a marijuana ETF. And now, that ETF is smoking hot.

1.       The ETFMG Alternative Harvest ETF (MJ - Free Report) holds 30 companies that are involved in the marijuana industry. Because of US regulations and laws, most of the companies in the industry are in Canada. As a result, about half of the ETF are actually Canadian companies, with Cronos Group the largest position in the portfolio at 8.6%.

2.       AdvisorShares Vice ETF (ACT - Free Report) is another way to play the marijuana trend. This also holds about 30 companies but it includes several “vices” including alcohol and tobacco, as well as cannabis. AbbVie is the largest holding followed by Constellation Brands.

Interested in Leveraging FANG?

BMO recently launched the BMO Rex MicroSectors FANG+ Index 3x leveraged ETNs (FNGU - Free Report) and (FNGD) this year.

They are FANG+ because they include 10 stocks instead of the traditional 4 of normal FANG. They include: Facebook, Apple, Amazon, Netflix, Google, Alibaba, Baidu, NVIDIA, Tesla and Twitter.

Each is 10% weight in the portfolio.

This is an ETN, not an ETF.

One is tripled leveraged to the upside and the other is triple leveraged to the downside.

What are the risks of buying into an ETN?

Should investors be buying any of these new ETF or ETN products this year? And will regulators step in to shut down the marijuana ETF?

Find out all of this and more on this week’s podcast.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>