3D Printing ETF Can Print A Rebound
Somewhat lost in all the fanfare surrounding alternative technology exchange traded funds, such as artificial intelligence and robotics funds, is the solid performance being turned in by the only 3D printing ETF on the market.
Though it has lost 2.5 percent this month, the 3D Printing ETF (NYSE:PRNT) is up about 20 percent year-to-date. PRNT is issued by New York-based ARK Investment Management, the company behind some of this year's best-performing non-leveraged ETFs.
PRNT, which debuted in July 2016, follows the Total 3D-Printing Index. That benchmark “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.
Although 3D printing stocks have a reputation for volatility, the positive trade-off for investors is that growth expectations for the industry are nothing short of jaw dropping.
“Worldwide demand for 3D printers is projected to expand at a 24% annual pace to $5.4 billion in 2021,” according to Freedonia Group. “Demand for printers on a region-by-region basis largely follows the overall 3D printing market. All global regions are expected to record growth in excess of 20% per year through 2021.”
That jibes with McKinsey research cited by ARK, which estimates the 3D printing market could boom from $4 billion in 2014 to $490 billion in 2025. PRNT's 48 holdings have a weighted average market value of $30 billion. Those holdings include familiar 3D printing names, such as HP Inc (NYSE:HPQ), Stratasys, Ltd. (NASDAQ:SSYS), and 3D Systems Corporation (NYSE:DDD).
PRNT provides investors with exposure to multiple parts of the 3D printing space. The ETF allocates half its weight to hardware providers and 30 percent to CAD and simulation software makers. PRNT also features exposure to service centers and 3D printing measuring and scanning firms.
“Through 2021, overall printer demand will be driven by wider adoption of production and desktop printers,” according to Freedonia. “3D printing for prototyping applications is relatively mature in the industries where it is already most widespread – automotive, aerospace, consumer product design, and healthcare.”
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