Horizons Psychedelic Stock Index ETF
NEO: PSYK
The world’s first psychedelics ETF was launched by Horizons ETFs in January 2021, marking a milestone for the space.
Key Facts
- Inception date: Jan 26, 2021
- Underlying Index: North American Psychedelics Index (by Solactive)
- Management Fee: 0.85%
Investment Objective
“The ETF seeks to replicate, to the extent possible and net of expenses, the performance of a market index that is designed to provide exposure to the performance of a basket of North American publicly-listed life sciences companies having significant business activities in, or significant exposure to, the psychedelics industry. Currently, the ETF seeks to replicate the performance of the North American Psychedelics Index, net of expenses.”
After decades of restrictions, recent policy changes and exemptions in Canada and the United States have allowed for increased research in the therapeutic application of psychedelic compounds, and the potential to create an entirely new marketplace for drugs derived from psychedelics. That momentum has allowed for the emergence of a number of psychedelic-focused life sciences companies and we expect many more to follow. An ETF makes particular sense for this emerging industry as it offers investors diversified exposure to the overall growth of the psychedelics sector without the same single stock risk associated with picking your own companies.
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 at present:
The Index will be rebalanced quarterly according to a number of factors, some of which are described below.
UPDATE: March 2021
Added: Algernon Pharmaceuticals; BetterLife Pharma; Core One Labs; Lobe Sciences
Removed: Nova Mentis
Latest News
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
You can view the Index, and related documents, here.
Companies in the Psychedelic 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)
Added February 2021:
- Mindset Pharma (MSET)
- Novamind (NM)
UPDATE: March 2021
Added: Algernon Pharmaceuticals; BetterLife Pharma; Core One Labs; Lobe Sciences
Removed: Nova Mentis
