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Singapore robo offers cannabis fund

The cannabis and uranium sectors have underperformed and ETFs focused on these themes can be value plays, Kristal AI says.
Cannabis leaf against the sky. hand holding a marijuana leaf on a background of blue sky. Background of the theme of legalization and medical hemp in the world. Green canabis on marihuana field farm

Singapore-based robo-advisory firm Kristal AI has added more ETFs to its platform, including two themed-products, the Alternative Harvest ETF and the Global X Uranium ETF.

Both are available to retail investors in Singapore, according to Ashwin Patravali, Hong Kong-based head of business development.

Investors using the platform can gain exposure to the passive products by directly investing into them, depending on their risk profile, or they can use an advisory algorithm to personalise a portfolio of ETFs for them, he added.

The Alternative Harvest ETF, managed by New Jersey-based ETFMG, invests in the global cannabis industry, according to the US firm’s website. The firm notes that the product does not invest in any US or foreign company whose business activities are illegal under any applicable federal or state law. In the US, 11 states have legalised cannabis for recreational use and 33 states for medical purposes.

The Global X Uranium ETF, managed by New York-based Global X, provides access to companies involved in uranium mining and the production of nuclear components, including those in extraction, refining, exploration or manufacturing of equipment for the uranium and nuclear industries, according to its website. Global X, which was founded in 2008, was acquired by Seoul-based Mirae Asset Global Investments last year.

Kristal AI believes that there are investment opportunities in both the cannabis and uranium industries.

“We are constantly looking to broaden our product offering and hence added alternative medicine and energy-related commodities. Few of these sectors have been underperforming for some time and present good value at current levels,” Patravali said.

“Cannabis is a growing industry in the long-term, benefitting from medicinal uses and legislation. Meanwhile, Uranium miners have been going bust amid low ore prices and there is a lack of long-term supply, so US government support may be needed to revive the industry.”

The robo-advisory firm also added the Blackrock Core UK Gilts Ucits ETF on its platform this month, which provides exposure to GBP-denominated UK government bonds.

“We are also looking at further diversifying our offering on a regional context, such as looking at more Europe- and UK-domiciled ETFs,” the spokesman said.

Separately, the spokesman said that there has been an increased demand for safe-haven investments such as gold, silver and treasury ETFs.

“The trade tensions have also made us look at investments with lower correlation to US and China, such as Europe, Vietnam, Russia and water ETFs,” he said.

According to the firm, it now has around 5,000 users across Asia, the Middle East and the Americas and AUM has grown threefold to around $80m from $25m in January this year. The robo is operational in India, Singapore and Hong Kong.

The Global X Uranium ETF versus its sector and the MSCI AC World Index

Source: FE Analytics. In US dollars. Note: Performance figures for ETFMG’s Alternative Harvest ETF are not available on FE.

Part of the Mark Allen Group.