ROBO Not Quite a 3D Printing ETF
October 28th, 2013 at 7:30am by Tom Lydon
There are a few certainties regarding three printing stocks. For over two years, 3D printing equities have been red hot. Some think companies like 3D Systems (NYSE: DDD) and Stratasys (NasdaqGM: SSYS) are purveyors of disruptive, game-changing technology.
Others think the stocks are richly valued and poised to retreat in dramatic fashion. What is not up for debate is that despite all the hype and stellar returns, 3D printing stocks are not found in many ETFs. At least not for size. [Investors may be Ready for a 3D Printing ETF]
There is a 3D printing index, the Stoxx Global 3D Printing Pure Play Index. The index launched in July, but there still is not a U.S.-listed pure play 3D printing ETF. The First Trust Technology AlphaDEX Fund (NYSEArca: FXL) features Stratasys and 3D Systems among its top-four holdings at a combined weight of 4.15%.
Until an ETF issuer steps forward with a fund specifically geared to 3D printing stocks, the newly minted Robo-Stox Global Robotics and Automation Index ETF (NasdaqGS: ROBO) might just have to do.
ROBO debuted last week and with its hyper-focus on what some investors may view as an obscure market niche and 0.95% annual expense ratio, it is not surprising that the fund has been met with some criticism. It may be a cliché, but time will tell just how good of an idea a robotics ETF is. [Robotics ETF Debuts]
One thing that cannot be taken away from ROBO is that its exposure to 3D printing exposure is decent relative to other ETFs. 3D Systems and ExOne (NasdaqGM: XONE) combine for 3.4% of ROBO’s weight. Stratasys is conspicuously absent from ROBO although its market value of $4.2 billion is more than triple that of ExOne.
ROBO also has a 1.4% weight to Sweden-based Arcam AB (OTC: AMAVF) and a 2.1% allocation to Faro Technollogies (NasdaqGM: FARO).
Since ROBO does have a decent amount of small-cap exposure, another notable 3D printing absence from the fund is California-based Organovo Holdings (NYSE: ONVO), shares of which have more than tripled this year.
Overall, ROBO’s almost 7% weight to 3D printing stocks is good compared to other ETFs and spectacular when considering there is no 3D printing ETF. However, that does not mean ROBO is a “strong buy.”
ETF Trends editorial team contributed to this post.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.