BITO Tops List of Best ETFs in October
Bitcoin exchange-traded funds dominated the list of best performers in October as the fund's share prices rose on the potential approval of a spot bitcoin ETF.
In the meantime, marijuana funds sagged as dysfunction in Congress damped hopes of regulatory relief.
The $1 billion ProShares Bitcoin Strategy ETF (BITO) outperformed all other exchange-traded funds, returning 28% in October, while the Subversive Cannabis ETF (LGLZ) lost 31%, making it the worst performer for the month. The overall U.S. stock market, as measured by iShares Core S&P 500 ETF (IVV), lost 2.2% last month.
The best and worst performers were chosen based on one-month trailing total returns as of Oct. 31, according to etf.com data. Leveraged and inverse funds were excluded and etf.com data only includes ETFs traded on U.S. exchanges.
Bitcoin Rose in October
Bitcoin price rose by more than 20% in October as the Securities and Exchange Commission decided not to appeal a court decision that ordered the agency to reconsider Grayscale Investments’ application to convert its Grayscale Bitcoin Trust into a spot bitcoin ETF.
Financial advisors may be more likely to embrace a spot bitcoin ETF than the futures bitcoin ETFs that are now on the market.
Marijuana ETFs, which dominated the best-performing list in September, all fell by double digits in October as the prospect for regulatory relief for marijuana companies dimmed.
Best Performing ETFs of October
Ticker | Name | 1-Month Total Return | Assets Under Management ($) | Expense Ratio |
28% | $1.1 Billion | 0.95% | ||
27.81% | $57 Million | 0.76% | ||
27.80% | $1.5 Million | 0.85% |
Worst Performing ETFs of October
Ticker | Name | 1-Month Total Return | Assets Under Management ($) | Expense Ratio |
-31% | $0.7 Million | 0.75% | ||
-31% | $2.2 Million | 0.39% | ||
-30% | $0.9 Million | 0.79% |
Marijuana ETFs Disjointed
In August, a letter leaked in which the U.S. Department of Health and Human Services recommended the Drug Enforcement Administration change marijuana to a Schedule III drug from Schedule I. That change would substantially lower the tax rates on marijuana companies. Those companies are now prohibited from writing off business expenses related to selling marijuana.
The SAFER Banking Act also passed out of the Senate Banking Committee in September. If it becomes law, marijuana firms would be able to access financial services more easily.
In October, the U.S. government didn't reschedule marijuana or pass the SAFER Act. Instead, the House of Representatives voted to remove its speaker for the first time in history and was unable to elect a new speaker for weeks afterward.
“The positive momentum around cannabis ETFs have faded due to issues in Washington, including the potential for a government shutdown coupled with the lack of leadership in the House until recently,” said Dave Mazza, chief strategy officer at Roundhill Investments, which runs the Roundhill Cannabis ETF (WEED).
Contact Gabe Alpert at gabriel.alpert@etf.com
