Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Nano Goes to Wall Street

If we needed a reminder that "nano" is slowly approaching the radars of mainstream investors, then First Trust Portfolios has provided it with the launch of a nanotechnology mutual fund (ticker: FTNATX). This is the first commercial opportunity for those investors looking to dip their toes into the exquisitely small world of nanotechnology.

Punk Ziegel of New York could reasonably claim to have been the very first firm to put together a grouping of commercial nano companies, but that appears to be available only to its private banking clients. (If you are one of its clients, you can say, "Hey... my banker's a Punk!") But First Trust's nanotechnology portfolio can be bought by anyone with a minimum investment of $1,000 and an initial offer price of $10. Considering this is an unmanaged fund, the fees are steep with an initial sales charge of 1.05% with a limit running at a maximum of 4.95%.

There are 25 companies included in the fund with an interesting mix: 40% are small-cap growth stocks, and another 28% are large-cap growth stocks. These include General Electric (NYSE: GE  ) , ExxonMobil (NYSE: XOM  ) , Dow Chemical (NYSE: DOW  ) , and Dupont (NYSE: DD  ) . Yes, folks, these are nanotechnology companies. However, any nanotechnology they may develop over the period of time this fund is in existence will not impact the share prices of these behemoths in any meaningful way.

Among the small firms, we find a nano-materials company, Nanophase Technologies (NYSE: NANX  ) ; a nano-biotechnology company, Skyepharma (Nasdaq: SKYE  ) ; a nano-tool maker, Veeco Instruments (Nasdaq: VECO  ) ; and Headwaters Incorporated (Nasdaq: HDWR  ) . The latter is included for its subsidiary Hydrocarbon Technologies, which is working on producing more cost efficient fossil fuels by the inclusion of nanoparticles in its proprietary catalytic processes. Also included in the fund is Harris & Harris (Nasdaq: TINY  ) , a venture capitalist company specializing in VC investments in private nano companies.

You could invest in these small cap equities separately, but then you greatly increase your exposure to risk. The clever inclusion of the big caps in this fund does expose you to the potential growth from the small caps without all of the high risk that normally accompanies this type of potential growth.

This fund does expose you to all aspects of the current commercial nano picture, from the large caps working on nano developments to the small caps hoping to make it big in nano. There's even a limited exposure to some of those companies not yet public. It also excludes, it seems, those nano-pretenders who are building more hype than products.

Kudos to First Trust.

Discover other small pleasures on theNanotechnologydiscussion board.

Fool contributors Wherrett and Yelovich are better known as Caesium and Jat4 on The Motley Fool discussion boards. They welcome your input via email. Wherrett owns shares of Nanophase, but Yelovich doesn't own any of the companies mentioned.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 506303, ~/Articles/ArticleHandler.aspx, 10/26/2016 11:43:12 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,217.78 48.51 0.27%
S&P 500 2,144.73 1.57 0.07%
NASD 5,273.20 -10.20 -0.19%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/26/2016 11:27 AM
DD $68.95 Down -0.67 -0.96%
DuPont CAPS Rating: ****
DOW $53.72 Down -0.39 -0.72%
The Dow Chemical C… CAPS Rating: ****
GE $28.97 Up +0.32 +1.10%
General Electric CAPS Rating: ****
TINY $1.30 Up +0.01 +0.78%
Harris and Harris CAPS Rating: **
VECO $21.55 Up +0.20 +0.94%
Veeco Instruments CAPS Rating: ***
XOM $87.20 Up +0.48 +0.55%
ExxonMobil CAPS Rating: ****