Ninepoint says its fund protects against volatility and focuses on long-term vision of sector
Ninepoint Partners LP celebrated joining NEO Connect and looked ahead to the next 10 years of growth in the marijuana industry.
Series PTF securities of the Ninepoint Alternative Health Fund (ALTHE) are now available and managing partner James Fox said it has widened the availability of a fund ranked number one by Morningstar. Under the ticker ALTHE, it invests in companies engaged in nutrition, nutraceuticals and new forms of medicine and pharmaceutical solutions, including Canadian LPs of cannabis.
Fox said the flexibility of the fund is attractive to investors while it also gives them less volatility at a time when firms will be scrambling for profits and potential partnerships with big pharma and big alcohol.
He said: “For us this is why we like this type of fund – it can go to cash at times, it can use some options to hedge some positions that might have run up and it’s also involved in nutraceuticals so it can move to larger names in the space.
“There are more established players in the nutraceutical space so our view is that it’s tough to time and it’s going to be volatile. When we’re presenting this fund, we are presenting the 10-year view of the cannabis space where we are going to have more and more countries go legal for both rec and medicinal, and more and more states in the US.”
He added: “We think in a sector that’s highly volatile, often the end client gets shaken out of the sector when it’s down 30-40% and we’ve seen it already in the sector. Our fund is really positioned to participate in the next ten years and have less volatility.”
Fox believes the marijuana sector will grow 8-10 times from its current position and said investors should have deducate a certain percentage of their asset allocation to it without being subject to “gut-wrenching swings” that often see people tap out.
He said it’s unlike the emergence of other industries like tech and telecom in that it already exists on the black market. “Now we’re making it legal so it’s not really guess work that there is a demand,” he said. “We saw the line-ups on October 17!”
Fox also talked up the benefits of a PTF over an ETF, highlighting advantages such as the lack of bid-ask spreads, cheaper MER and easier bulk trading because of the ability to submit a single order for all eligible client accounts. He thinks NEO is the perfect partner for Ninepoint.
He said: “NEO is a growing platform. They have a lot of dealers on it – and the PTF is something that suited our needs. NEO is very entrepreneurial and I believe our firm is too.”
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