Investing in the future with a 3D printing ETF
3D printing processes make it possible to create three-dimensional objects from different materials. Thanks to the wide range of applications – from tiny computer parts, prostheses and toys to large components for buildings – the technologies are becoming increasingly popular.
Although the concept is thought to have enormous potential, the companies involved are usually still very small. It is therefore difficult for investors to find a suitable investment. With a 3D printing ETF, however, we can bet on the entire industry – this can be a worthwhile alternative!
But what are the chances for this still young field? When is the ideal time to enter the market? And which 3D printing ETF is the right one? You’ll find the answers in this article!
In brief:
- 3D printing describes a range of processes for the production of objects
- The fields of application are numerous: medicine, industry, art, construction, technology and much more
- New, previously impossible components can also be produced in this way
- Entry is difficult for investors as there is only one 3D printing ETF
What is 3D printing?
When we hear ‘3D printing’, we probably first think of devices that hobbyists and enthusiasts use to produce toys and collector’s items at home. Perhaps the stories of 3D-printed firearms also come to mind, with which the users usually only injure themselves…
In fact, 3D printing is now a generic term for a range of technologies and processes that can be used to create a wide variety of objects. These include the familiar plastic toys as well as highly complex components for industry, medicine and other sectors.
The process used is known as ‘additive manufacturing’: The material is applied inside the printer as a single layer in the desired shape and dried chemically or mechanically. Once this layer has solidified, another layer is created on top of it. The process is repeated until the workpiece is completed according to the underlying plan.
The components are no longer limited to plastic! Modern printers can shape steel, titanium, concrete, ceramics, carbon fibre and other materials into any desired form. This means that not only are the areas of application enormous; previously unrealisable objects can now also be produced.
Market overview: This is what the 3D printing industry currently looks like
Although 3D printing offers a wide range of interesting possibilities, the technology has been comparatively slow to catch on. The time and energy required for the printing process as well as the considerable costs for the printing materials and the devices themselves have slowed down practical use for a long time.
To date, 3D printing has therefore mainly been used for special, valuable objects and items that cannot be produced in the conventional way. This includes, for example, rapid prototyping, i.e. the rapid production of prototypes in industry and science.
Such components help with research and development, serve as models and improve new products. As they are only required in very small quantities, higher manufacturing costs are a negligible problem. While the mass use of 3D printers has been rather sluggish, rapid prototyping has long enjoyed great popularity
During the Covid pandemic in particular, however, its use became more and more widespread: many bored hobbyists and technology fans discovered 3D printing as a hobby and the general shopping mood led to an increase in demand for such products.
Costs fell and more and more 3D-printed products found their way onto the market. Supply problems with various goods also helped the trend, as 3D printers can quickly provide supplies thanks to their flexibility. The number of companies active in the field of additive manufacturing also increased dramatically.
In industry in particular, there are now numerous suppliers that successfully utilise 3D printing and have thus reached a medium company size. Even large companies now have their own departments. In general, however, the industry is characterised by numerous small companies. They often offer individual, innovative products or manufacture customised objects.
future prospects of the industry
3D printing is an area with particularly bright prospects for the future, both in industrial production and in the hobby and home sector. The production of medical prostheses and highly complex components offers unimagined possibilities and demand is correspondingly high.
At the same time, additive manufacturing is also capable of revolutionising our everyday lives. In the future, printers could produce almost all the items we need for our private lives and, for example, relieve the burden on supply chains (e.g. printing household items ourselves instead of travelling to a shop or having goods delivered).
In the past, success was hampered by high costs: high energy consumption, expensive devices, expensive printing materials, high time expenditure for printing processes. However, all aspects are improving noticeably and accelerating the development of the industry.
The energy consumption and printing speed of new devices continue to improve; the costs and selection of printing materials are also becoming increasingly attractive. In addition, 3D printers are penetrating more and more areas of our lives: The additive manufacturing of components made of cement or steel, for example, is a field of application that makes the difficult transport of large constructions obsolete and is becoming increasingly popular.
Investors are aware of these future prospects and are investing in 3D printing ETFs by the dozen. Despite the entry of large companies such as Microsoft, Airbus etc., no real leadership of individual companies has yet developed. However, this situation is also likely to change in the future.
3D printing ETF as an ideal entry point
Additive manufacturing is an area that is particularly suitable for investment through a 3D printing ETF. This is because the industry is considered to be rather fragmented and difficult for investors to understand.
The problem is compounded by the fact that companies such as Microsoft, Lockheed Martin and Boeing are heavily involved, but 3D printing only accounts for a fraction of each of these companies’ portfolios. By buying the relevant shares, we would only be investing a very small proportion in additive manufacturing.
A 3D printing ETF avoids this problem through its broad diversification. Although the heavyweights mentioned above are often included here too, they are only one of many. 3D printing ETFs contain dozens of other, often smaller and highly specialised companies. This is what makes them so interesting for investors!
3D printing ETFs: limited choice
If you want to invest in a 3D printing ETF, there is currently only one product to choose from: The ‘PRNT – 3D Printing ETF’ from Ark Investments. It is based on ‘The 3D Printing ETF Index’ and although this would provide a good basis for other 3D printing ETFs, it is the only such offering to date.
Investors have to pay a comparatively high fee of 0.66% per year, but this gives them access to 54 companies from the additive manufacturing sector. The 3D printing ETF has been available since 2016 and has since generated a predominantly positive result with returns of up to 40% in some cases (2020).
In 2022, the performance has been very negative so far with a loss of more than 30%; however, this could be a sensible time for interested investors to get in. However, with a current volume of only 200 million euros, the small size is another risk factor.
Attention!
Generic technology ETFs are often labelled as 3D printing ETFs on dubious websites. This is not correct: there is currently (as of September 2022) only one 3D printing ETF!
To make matters worse, the ARK ETF Trust-3D Printing ETF is a US product that is not readily available from all German brokers. If you would like to buy this 3D printing ETF at a favourable price and your current provider is causing you problems, it may therefore make sense to register with Scalable Capital.
If you are also interested in other future ETFs, then read the articles on ETFs for electric mobility or ETFs for renewable energy. If you prefer economic ETFs, I recommend the article on financial sector ETFs and industrial ETFs.
Conclusion: Highly interesting sector, difficult entry
Financial and technology experts agree that additive manufacturing is one of the most exciting areas of all. Unfortunately, there is currently only one 3D printing ETF available – and it has performed poorly in recent months!
Interested investors who do not want to miss out on the boom in 3D printing therefore do not have much choice. They can opt for the ARK ETF Trust-3D Printing ETF and bet on an imminent recovery in the figures, or invest directly in the companies involved through individual shares (possibly using the 3D printing ETF as a template?).
However, the latter option is associated with considerable expense and requires higher start-up capital. For investors who do not find either option attractive, the only option left is to sit out the 3D printing megatrend – but given the considerable potential for the future, this could be a decision that is quickly regretted!
