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Stoxx, a leading provider of securities indices, has launched the Stoxx Global 3D Printing Pure Play Index, a new index tracking the investment performance of listed pure-play 3D-printing companies.
The index has been designed to underlie index-linked investment products such as certificates, notes and exchange-traded funds (ETFs).
3D printing is the process of making virtually any shape from a digital model. As an additive manufacturing technology, it has wide applications across many industries, including aerospace, health and biotech, education and manufacturing.
Commenting on the launch, Hartmut Graf, chief executive officer of Stoxx, said: “The Stoxx Global 3D Printing Pure Play Index provides market participants with a transparent and rules-based barometer of leading stocks in the flourishing 3D-printing sector. The new index focuses solely on pure-play or highly-involved companies in the 3D-printing business, making it truly representative of this expanding market.”
The starting universe for the new index is defined as all stocks in the Stoxx Global Total Market Index, which currently covers 65 countries and over 7,000 securities. To be eligible for inclusion companies must pass a set of screens. These screens include a requirement that more than 10% of their revenues must be generated from the 3D-printing sector. Companies must also have a minimum three-month average daily trading volume (ADTV) of €25,000 and a minimum free-float market capitalisation of €10 million.
Companies are then ranked by revenues derived from the 3D-printing sector and the top 30 companies are selected for inclusion in the index. Constituents are weighted by free-float market capitalisation, subject to a component weight cap of 20%.
The index is available in price, net and gross return versions, and calculated in euros and US dollars. It is reviewed annually in September and rebalanced quarterly. Daily history is available back to September 17, 2010.
The introduction of a pure-play 3D-printing index follows the launch of the Stoxx Global 3D Printing Tradable Index back in April this year. The main difference between these indices is that to be eligible for inclusion in the pure-play version a company must generate more than 10% of their revenue from the sector compared to just 1% for the original index. However, to ensure diversification the minimum free-float market capitalisation requirement is lower, at €10 million compared to €80 million for the original index.
While the original Stoxx Global 3D Printing Tradable Index has been licensed to underlie an index-linked certificate issued by UniCredit, it may be a while before we see these indices replicated in ETF format. More companies operating in this space will probably need to come to market (many are venture capital-backed and privately owned) to ensure that there is both sufficient diversification and need for an ETF-based solution.