How The Major Indexes On OTC Markets Performed In 2020

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

2020 was a year of divergence in markets. Some industries, like health care and e-commerce, benefited greatly from the effects of the pandemic. Others, like energy and travel, did not. 

Looking at the indexes that track securities on OTC Markets, there were clear pockets of strength and weakness. Here’s a rundown of how the major OTC Markets indexes performed in 2020.

OTCQX Composite

The OTCQX Composite Index, a benchmark for the overall OTCQX Best Market, rose 11% in 2020. Much of those gains came in the fourth quarter, as the index gained 21% during the final three months of the year.

In January, OTC Markets Group announced that 58 new companies had been added to the index, including Acreage Holdings Inc. ACRHF and Grayscale Bitcoin Cash Trust BCHG, and 40 were removed, including InMed Pharmaceuticals, Inc. INM and Smith-Midland Corp. SMID, which graduated to the Nasdaq on November 12 and November 17 respectively. 

OTCQX Billion+

The OTCQX Billion+ Index, posted similar numbers. The index, which tracks the performance of the 67 companies with market caps greater than $1 billion, rose 10% for the year but was up 21.5% in Q4. 

This index includes only the largest companies that trade on OTC Markets, many of which are multinationals with operations on multiple continents and large cash cushions such as Roche Holding Ltd RHHBY, BASF SE BASFY, and Experian plc EXPGY. 

OTCQX Banks

The OTCQX Banks Index, comprised of OTCQX community and regional banks, ended 2020 down 8% for the year as low interest rates weighed on the sector. 

According to OTC Markets Group, 14 banks were added to the index in the fourth quarter. Those banks were: Blackhawk Bancorp, Inc. BHWB; Bank of San Francisco BSFO; CoastalSouth Bancshares, Inc. COSO; Dacotah Banks, Inc. DBIN; First Home Bancorp, Inc FHBI; FineMark Holdings, Inc. FNBT; High Country Bancorp, Inc. HCBC; InsCorp, Inc. IBTN;  Kish Bancorp, Inc. KISB; Mars Bancorp, Inc. MNBP; SVB&T Corporation SVBT; Virginia National Bankshares Corporation VABK; Valley Republic Bancorp VLLX and White River Bancshares Company WRIV.

OTCQX U.S.

The OTCQX U.S. Index, which tracks U.S. OTCQX companies, rose 40% in 2020. 

The outperformance of the index compared to other OTC Markets indexes should hardly be a surprise, as broad-based U.S. equity indexes as a group outperformed their global counterparts last year. 

However in the case of the  OTCQX U.S. Index, much of the increase was due to the index’s exposure to cryptocurrency assets like the Grayscale Bitcoin Trust GBTC and Grayscale Ethereum Trust ETHC, both of which rose to new all-time highs in the fourth quarter. 

OTC Markets Group said 17 companies were added to the index and 21 removed at the end of the quarter. 

OTCQX Cannabis

Cannabis companies on the OTCQX market dramatically outperformed their exchange-listed peers last year. 

The OTCQX Cannabis Index, which tracks such securities, rose 33% in 2020 and 68% in the fourth quarter alone. That return was better than four cannabis exchange traded funds, including the largest cannabis ETF, the ETFMG Alternative Harvest ETF MJ, which fell 23% last year. 

Six new companies joined the index in Q4: 4Front Ventures Corp. FFNTF; PHARMACIELO LTD. PCLOF; Subversive Capital Acquisition Corp SBVCF; Skylight Health Group Inc. SHGFF; Terra Tech Corp. TRTC and The Valens Company Inc. VLNCF. 

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.