Investors roll up to Hatch for marijuana stocks
Most investors don’t want to see their money go up in smoke.
But there’s been a distinct preference among early investors through Kiwi Wealth’s Hatch investment service to invest their money in marijuana companies.
Hatch launched in October, giving ordinary investors an easy and cheap way to buy and sell shares of companies listed on overseas sharemarkets.
And one month in, Kristen Lunman, Hatch’s general manager, said medical marijuana and technology firms have dominated the top 10 list of the most popular company shares bought by investors through Hatch.
Believers in the medical value of marijuana have had no easy way of investing directly into the sector in New Zealand, where medical use of marijuana is not yet legal.
But Hatch has made it possible for Kiwi investors to by shares in listed companies from Canada, where using marijuana for medical reasons is legal.
Two Canadian firms listed in the United States – Cronos and Canopy Growth Corporation – both made Hatch’s top 10.
The cannabis shares are rubbing shoulders in the Hatch top 10 with the giants of the technology world, which have been transforming the lives of Kiwis.
Apple, Amazon, Microsoft and Facebook all appeared in the top 10, as well as several lesserknown technology firms including Nvida and AMD, both of which make components for electronics.
Among the selfdirected investors coming to Hatch to build portfolios are clearly fans of legendary American investor Warren Buffett, whose Berkshire Hathaway
B shares ranked as the fifth most popular share bought through Hatch.
The number one was Tesla, the maker of electric cars.
So far more than $1 million has been invested through Hatch, mostly into direct company shareholdings.
Lunman had expected most investors to invest using what are known as exchange-traded funds, or ETFs, which are parcels of shares from different companies related by things like industry or geography.
She suspected there had been pent-up demand for direct investments in companies such as Amazon and Apple.
While most people do have indirect investments through their KiwiSaver funds in most of the giants of US companies listed on the US sharemarkets, it has always been harder for people to buy direct stakes in their own name.
Hatch charges no subscription fees or commissions. To buy or sell a fraction of a share, investors are charged a US$3 fee (about $4.50).
The fee to buy or sell full shares is 2 cents a share, though there is an US$8 minimum.
Hatch also earns a margin of 0.5 per cent on converting New Zealand dollars to US dollars.
Lunman said investors did not seem fazed by the market volatility that has left some KiwiSavers worried.
Instead, it appeared they were focusing on building long-term portfolios of shares through good times and bad. ‘‘People aren’t panicked,’’ she said.
Volumes of new business remained high.
‘‘Our deposits each day haven’t budged. They are consistent, which I think is a rational approach to markets,’’ she said.
Kiwi Wealth is part of the New Zealand Post group of companies, which includes Kiwibank.