4 New Futuristic ETFs Offer Laser Focus

November 02, 2016

The world today might not be the one people imagined when they thought of the future decades ago. We aren't flying in cars like in “The Jetsons,” and most of us don't have a talking robotic housekeeper.

Still, the world today is pretty darn futuristic. Google, Uber and a host of other companies are competing to see who can unveil the first driverless cars; Amazon is toying with the idea of delivering packages with drones; and governments around the world are scrambling to protect and arm themselves in a new age of cyberwarfare.

Automation, drones and cybersecurity are just some of the areas of rapid technological advancement that will have a profound impact on society in the years to come. Successful companies in these industries have the potential to bank big profits, and investors in those companies will have a chance to share in the upside.

That's the thesis behind several niche exchange-traded funds that key in on futuristic themes, such as those mentioned above, along with others. These ETFs offer investors targeted exposure to companies working in cutting-edge industries, something that broader, more diversified ETFs don't provide.

Proponents of passive index investing will likely scoff at these offerings, while investors with a more active bent may find them intriguing. In any case, here are a few of the more interesting futuristic ETFs on the market.

Drones

The PureFunds Drone Economy Strategy ETF (IFLY) is one of a handful of futuristic ETFs launched this year.

IFLY provides investors exposure to the drone industry. Specifically, IFLY holds companies involved in the commercial drone market, which caters to clients involved in agriculture, construction, real estate, energy, media, government and others. PureFunds expects that the benefits of drone technology will "touch a majority of industries in the coming years."

Top holdings of IFLY include AeroVironment, Parrot and GoPro. The ETF has a 0.75% expense ratio and has returned about 1% since its inception in March.

3D Printing

Another flashy futuristic fund that launched this year is the 3D Printing ETF (PRNT), issued by ARK Invest, an ETF company founded in 2014. PRNT is one of a number of thematic funds focused on "disruptive innovation" launched by ARK in the past few years.

PRNT itself is brand new, having been on the market for just three months. The ETF holds shares of companies involved in 3D printing hardware, computer-aided design, 3D printing simulation software, 3D printing centers and 3D printing materials.

ARK, like many others, expects 3D printing to "revolutionize manufacturing." If so, PRNT, whose top holdings currently include HP, 3D Systems and ExOne, may be poised to benefit.

The ETF has a 0.66% expense ratio and is up 3.9% since inception.

 

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