Vanguard Mutual Fund Surprisingly Owns $47 Million of Cannabis Stocks

Vanguard Developed Markets Index Fund Form N-Q SEC Filing Reveals Investments in 3 Canadian Cannabis Companies

The world’s largest mutual fund company revealed in an SEC filing that it has invested into the three largest Canadian cannabis producers. Vanguard’s $110 billion Developed Market Index Fund, which has multiple classes that include  4 mutual funds and an ETF, filed a Form N-Q for the period ending March 31, 2018 this week that shows ownership in Aphria (TSX: APH) (OTC: APHQF), Aurora Cannabis (TSX: ACB) (OTC: ACBFF) and Canopy Growth (TSX: WEED) (NYSE: CGC):

  • Aphria – 759,384 shares
  • Aurora Cannabis – 2,450,644 shares
  • Canopy Growth – 879, 776 shares

Based on the current prices in U.S. dollars, the investments represent approximately $47 million. While this is a small part of the fund’s total value, the stakes represent about 0.4% of the overall market capitalization of the three companies. The fund, which is passively managed, “provides a convenient way to match the performance of a diversified group of stocks of large-, mid-, and small-cap companies located in Canada and the major markets of Europe and the Pacific region,” according to its operator.

As the global legal cannabis industry matures, index funds and mutual funds are likely to play an increasingly larger role as owners of the stocks. Aurora Cannabis was added to the S&P/TSX Composite  Index in March, joining Aphria and Canopy Growth. There are several cannabis-focused funds trading as well.

Exclusive article by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

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