March 14, 2004

(Nano)Stock Picking with a Pin attempt

This week's most inept attempt at jumping on a moving train comes from First Trust Portfolios and their newly launched Nanotechnology Portfolio (Ticker Symbol: FTNATX). In what appears a random selection of technology stocks the prospectus for the fund claims to provide an "investment that seeks to provide above average capital appreciation by investing in a concentrated portfolio of Nanotechnology related companies".

Shareholders of Elan, Flamel, Headwaters and oops, here comes Nanogen again, may be surprised and delighted to find their investments now labelled as nanotech pure plays, while researchers at nanaotube backers ConocoPhillips, and nanodiamond producers ChevronTexaco may feel that the inclusion of ExxonMobil is a slap in the face to the considerable number of their researchers and venture capitalists busy on all things nano. While Punk Ziegel as reported last month chose not to include IBM and HP "because nanotechnology does not have an impact on their valuations" First Trust Portfolios have no such qualms.

While it would be impossible to include the ever growing number of publicly quoted companies applying nanotechnology around the world, picking stocks at random does not really justify the fees charged. On the other hand, if there is any logic to this, we would be intrigued to hear about it.

At least whoever wrote the prospectus read the tutorial "What Is Nanotechnology?" by a certain well known author of this parish, and was proficient with the cutting & pasting if not the credits.

Overall, anyone congratulating themselves on putting money into a portfolio like this reminds us of the man who, upon scrambling aboard the moving train dances a jig on the roof, totally oblivious to the upcoming tunnel. This may be a good tech portfolio, but nano it is not.

Posted by Cientifica at March 14, 2004 06:22 PM
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