Rahul Bhushan co-founded Rize ETF and has a wealth of experience in systematic strategies, indexing and ETF strategy. He’s worked in investment banking and then for the client side and played an instrumental role in the build-out of thematic capability at ETF Securities. He was previously Co-Head of ETF Investment Strategies at Legal & General Investment Management.
- 4:00 – Rahul in ETF space with Rize for 5 years, before that worked in bank, exposed to ETFs. 4 founders of Rize were London based asset managers, who in 2013 were hired by ETF Securities to build out their platform. At the time, ETCs were specialized, but not ETFs. From 2013-2018, it grew from 0 to 20 funds across many spaces, focusing on more niche areas that bigger funds weren’t focused on. Most successful in the thematic area and in 2014 launched Europe’s first thematic fund on robotics sector. Set up Rize in 2019 for thematic ETFs and launched cyber-security and medical cannabis ETFs this year. Partnering with New Frontier Data, investing only in medical cannabis, 27 holdings.
- 9:00 – Focused on indexed ETFs where theme is easy to carve out from a traditional sector. Open to building active products if that’s where it’s better served, but where there is more focus and specificity, makes more sense to use a passive approach. European fund market is still new. Haven’t seen active thematic funds.
- 14:00 – Medical cannabis ETF with 70% pharmaceutical cannabis companies, a way to capture a biotech/healthcare angle. First wave was of cultivation and ended in 2018. Canopy (OTC:CGC), Tilray (NASDAQ:TLRY), Cronos (OTC:CRON), Aurora (OTC:ACB) benefitted from wave of excitement in Canada stocks to points where management teams were likely wondering how to keep revenues and profits up, which then imploded and valuations and prices came down. Many names have recovered but other experienced severe drops as well. Cultivation now building out retail presence, building strong consumer brands to command higher price points, which is the second wave, where we are currently. Medical is the third wave and will be powered by a different side of the sector, not the Canadian majors, not the MSOs, but the GW Pharma (NASDAQ:GWPH), Zynerba (NASDAQ:ZYNE), Arena Pharmaceuticals (NASDAQ:ARNA) that will make real headways into the space. Epidiolex is now approved in 28 European countries and growth runway is huge. Medical side most exciting to Rize – more resilient and robust, especially in European market.
- 24:00 – Popularity of CBD in Europe more than THC. CBD market globally, in beauty and wellness products as well as in medical products, so much potential and thinking about building a CBD focused ETF. Charlotte’s Web (OTCQX:CWBHF) a big player, but we’ll see more strong players show up.
- 45:00 – Ancillary players in the fund. 70% is medical-pharma cannabis, other 15% is agritech and supplies like GrowGeneration (NASDAQ:GRWG) [which trades on Nasdaq, not on NYSE as stated]. Scott’s Miracle Grow (NYSE:SMG) not as much of a pure play than GRWG, which is one of most profitable holdings after GWPH. Q1 earnings came in strong and an exciting company, once it came off OTC markets it was an obvious choice. Other 15% of portfolio is hemp and CBD holdings, mostly from Australia and US. Don’t include holdings exposed to rec market, like IIPR, even though they trade on major exchange. Patients for medical cannabis and CBD don’t stop that expenditure even during recession as it’s not discretionary, so more natural resiliency in cash flow of medically focused companies. Pandemic has catalyzed some parts of sector as well.
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