Often when it comes to choosing stocks for investors to add to one’s portfolio, picking just one company can certainly be intimidating–particularly for first time investors.
For those interested in the 3D printing sector, there’s certainly no shortage of stocks to choose from that span across a variety of stock exchanges. That said, investing in an exchange traded fund (ETF) is often a safe bet because they share similarities to mutual funds, but trade as stocks. In short, rather than investing in one company, ETFs provide investors with a portfolio of companies in a specific industry–such as 3D printing.
On that note, there’s currently only one 3D printing ETF–simply named The 3D Printing ETF (BATS:PRNT)–which makes choosing an ETF to invest in a little easier. With that in mind, here the Investing News Network (INN) breaks down the particulars of this exchange traded fund to better answer the question, “should you invest in the 3D printing ETF?”
The 3D Printing ETF: overview
As mentioned above, the 3D Printing ETF is currently the only pure play 3D printing ETF. The ETF was incepted on July 18, 2016 by Ark Investment Management, according to ETFdb.com, and tracks companies that match any one of these descriptors: 3D printing hardware; computer aided design (CAD) and 3D printing simulation software; 3D printing centers; scanning and measurement; and 3D printing materials.
The Ark Investment Management states the investment objective of the ETF “seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Total 3D-Printing Index, which is designed to track the prove movements of stocks of companies involved in the 3D printing industry.”
As such, ETFdb.com states that the 3D printing ETF currently tracks 43 holdings, with 50 percent of the index’s weight accounting for companies in the 3D printing hardware industry. CAD and 3D printing simulation software companies account for 30 percent of the holding; 13 percent are 3D printing centers; 5 percent account for scanning and measurement; and finally, 2 percent of the index’s weight falling under 3D printing materials.
The 3D Printing ETF: top holdings
While investors don’t place money into any specific company when it comes to the 3D printing ETF, it’s still worthwhile looking at who the top holdings are to get a better picture of what the ETF looks like..
Here’s a look at the 5 top holdings:
- MGI Digital Technology (EPA:ALMDG): MGI Digital Technology holds 6.98 percent of the index’s weight. Based in France, the company specializes in design, manufacture, marketing and distribution of digital printers and other related products. MGI also provides a digital direct-to-print technology that offers four-color process printing variable data, personalization, bar codes, and personal identification numbers, to name a few.
- Group Gorge SA (EPA:GOE): Group Gorge SA is the second largest company on the 3D Printing ETF, with it holding 6.15 percent weighting on the index. Group Gorge SA is another France-based company that specializes in the robotics industry and producing automated systems. It also creates prodways entrepreneurs for the 3D printing market development.
- 3D Systems (NYSE:DDD): It’s no surprise that 3D Systems is near the top of the list, with it weighting 5.99 percent on the 3D Printing ETF. 3D Systems provides 3D printing solutions, such as 3D printers, print materials, software, on demand manufacturing, and digital design tools. Its 3D printing technologies range from stereolithography, selective laser sintering, direct metal printing, multi jet printing, and color jet printing.
- ExOne (NASDAQ:XONE): ExOne provides 3D printing machines together with 3D-printed related products. The company mostly sells 3D printing machines and printing products to specification for its customers. ExOne’s weighting on the index is 5.73 percent.
- K2M Group Holdings (NASDAQ:KTWO): With 5.57 weighting on the 3D printing ETF, K2m Group Holdings is the fifth largest holding. The company’s primary focus is on achieving 3D Total Body Balance. In particular, its spine products are used by spine surgeons to treat spinal pathologies, including deformity, trauma and tumors.
The remaining 38 companies weighted on the 3D printing ETF can be found here.
The 3D Printing ETF: market outlook
According to research done by McKinsey, the 3D printing market projected to grow between $180 and $490 billion by 2025. In terms of 3D printer shipments, Gartner Research expects that to double from now until 2019, with that number reaching 5.6 million.
In short, there’s plenty room of room for investment opportunities to grow in the 3D printing industry, and the holdings on the 3D Printing ETF are surely poised to be part of that growth.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.