In another evidence of consolidation within the thematic market, HANetf has stated that its "no longer viable" medical cannabis and wellness ETF would be combined into its healthcare mega trends equal-weight ETF. On September 15, shareholders of the $10 million Medical Cannabis and Wellness UCITS ETF (CBDX) voted in support of the product being absorbed by …
In another evidence of consolidation within the thematic market, HANetf has stated that its “no longer viable” medical cannabis and wellness ETF would be combined into its healthcare mega trends equal-weight ETF.
On September 15, shareholders of the $10 million Medical Cannabis and Wellness UCITS ETF (CBDX) voted in support of the product being absorbed by the $9 million HAN-GINS Indexx Healthcare Megatrends Equal Weight UCITS ETF (WELL). According to HANetf, the merger will take place “on or after” September 29.
It comes after a difficult market backdrop for the cannabis sector has caused CBDX’s underlying index to shrink as numerous pure play businesses have either grown too tiny to be liquid or have delisted entirely. “Over the past two years, the medical cannabis sector has experienced increased compression and a narrowing universe, exacerbated by unfavorable market conditions,” HANetf stated in a statement.
“These developments have reflected in investor sentiment, and CBDX is no longer viable.”
The assets under management (AUM) of the ETF have fallen “significantly” during the last two years, according to the white-label issuer, and no recovery is predicted “in the short to medium term.”
It went on to say that WELL, which includes rising healthcare enterprises interested in life sciences and neuroscience, is a potential option.
The announcement comes just weeks after it was announced that the $37 million L&G US Energy Infrastructure MLP UCITS ETF (MLPX) will be combined with the $20 million Alerian Midstream Energy Dividend UCITS ETF (MMLP) and managed by HANetf as of October 12.
According to HANetf co-founder and co-CEO Hector McNeil, the merger might be the first of a series of ETF mergers for subscale goods where providers are looking to share the expenses of operating their range.
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