Too Bad SHRM Isn't Included In The ETF - YET! It makes sense that they wouldn't include a stock under a CTO.
However, below are the listing requirements and SHRM will definitely qualify.
I'm betting SHRM will be included ASAP after the CTO is lifted.
The Index will be rebalanced according to a number of factors, some of which are described below.
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