Print This: A 3D Printing ETF Comes To Town
A couple of years ago, 3D printing stocks were all the rage. That phenomenon cooled, but revenue growth estimates for the industry over the next several years are staggering. Fortunately, if 3D printing gets scorching hot again, investors will not to play stock picker within the group because they'll have a new exchange-traded fund to help with 3D printing stock-picking burden.
New York-based ARK Investment Management launched The 3D Printing ETF (NYSE: PRNT) (BATS: PRNT) on Tuesday. The new ETF follows the 3D-Printing Index. That index is “composed of equity securities and depositary receipts of exchange listed companies from the U.S., non-U.S. developed markets and Taiwan that are engaged in 3D printing related businesses within the following business lines: (i) 3D printing hardware, (ii) computer aided design (“CAD”) and 3D printing simulation software, (iii) 3D printing centers, (iv) scanning and measurement, and (v) 3D printing materials,” according to ARK.
As of July 18, PRNT's underlying index allocated nearly 53 percent of its weight to technology stocks and 32 percent to industrials, according to ARK data. Healthcare, consumer discretionary and materials are the new ETF's other sector weights.
The Innovative ETF
PRNT could prove useful for investors looking for sector-based, tactical exposure to small caps, as small- and micro-cap stocks combine for 64 percent of the new ETF's lineup. Large- and mid-cap stocks combine for about a third of PRNT's weight.
The new ETF holds 40 stocks, half of which are engaged in making or selling 3D printing hardware. Thirty percent of PRNT's holdings make CAD and 3D printing software. Familiar names on PRNT's roster include Stratasys, Ltd. (NASDAQ: SSYS), Microsoft Corporation (NASDAQ: MSFT), Allegheny Technologies Incorporated (NYSE: ATI) and Eastman Chemical Company (NYSE: EMN).
The 3D Industry
“ARK expects 3D printing to revolutionize manufacturing by collapsing the time between design and production, reducing costs, and providing greater design complexity, accuracy and customization. As the technology evolves and costs continue to decline, the 3D printing market has the potential to steal market share from traditional manufacturing and transform every sector of the economy,” according to the issuer.
Current revenue for the 3D printing industry stands at $4 billion, but that number could swell to a range of $180 billion to $490 billion by 2025, according to McKinsey data.
PRNT charges 0.66 percent per year, or $66 for a $10,000 investment.
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