Penn Wealth Publishing

2018.09.02 Penn Wealth Report Vol 6 Issue 03

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Symbol Name Focus % Weight IIVI II-VI Inc Scientific instruments 5.35% 660 SK Hynix Inc South Korean semiconductor co. 5.03% RSW Renishaw PLC Precision measurement equipment 4.66% MU Micron Technology Inc Semiconductor memory 4.63% AMD Advanced Micro Devices Inc Microprocessors/semiconductors 4.61% AMS ams AG Medical and industrial electronics 4.32% 6861 Keyence Corp Automation technology 4.27% AVAV AeroVironment Inc Unmanned aircraft systems for DoD 4.22% FN Fabrinet High-tech consumer electronics 3.93% FARO Faro Technologies Inc 3-D manufacturing systems 3.64% 12 penn Wealth RepoRt volume 6 iSSue 03 02 Sep 2018 Penn Wealth RePoRt Copyright 2018. All Rights Reserved. investment intelligence The Loup Frontier Tech ETF A brand-new investment in the financial marketplace offers us a great opportunity to discuss one of the most underrated and ignored aspects of investing: analyzing the actual human assets behind any particular investment vehicle. For a company, the primary human asset is the CEO. A great one can help his or her company excel in the most worn-out industry, while a lousy one can strike coal in a moun- tain of gold. For funds, which are baskets of individual companies, the fund managers and directors play the key role. Gene Munster was the managing director and senior research analyst at Piper Jaffray, where he focused primarily on technology companies. He made frequent appearances on the business networks, and we always unmuted the sound—a rare distinction— when he was being interviewed—a testament to his acumen. When Munster left Piper to become a managing partner and co-founder at Loup A new thematic investment focused on the disruptive companies that will help shape the future of technology Ventures, we were intrigued. Loup (which is French for "wolf ") is a "research-driven venture capital firm...investing in frontier technology." Right up our alley. Not only does Loup invest directly in frontier technology firms, the company also launched, this past July, the Loup Frontier Tech Index. This index is touted as a way for investors to leverage Loup's research-driven approach, but it goes an exciting step fur- ther. The firm licensed the index to Innovator Capital Management to form the Innovator Loup Frontier Tech ETF (LOUP $25-$27-$27). The premise behind the index/fund is that major technology shifts happen roughly ever ten to fifteen years. For example, these shifts included the personal computer in the 1980s, the burgeoning Internet in the '90s, and the smartphone in the mid-2000s (the first iPhone was introduced in 2007, with the precursor being the Blackberry). The research team at Loup is constantly on the lookout for the next major shifts, from robotics, to artificial intelligence (AI), to aug- mented reality (AR), to autonomous vehicles. It then applies its methodology to find the best possible investments in each category for possible addition to the fund. LOUP began trading just thirty days ago, on 25 Jul 2018, and has accumulated roughly $13 million in assets. The fund's small size gives it a tactical advantage by having the nimbleness to go where it wants after the positions it likes without the constraint faced by many larger funds (another big issue inves- tors should be aware of when investing in mutual funds and ETFs). After opening around $25 per share, LOUP now trades at $26.61—a 6.4% gain. The 31 current holdings in the fund (see the top ten in table) are from an eclectic mix of high-tech areas, from 3-D manufacturing to advanced aerial vehicles to medical technology. After reviewing the fund, and based on our respect for Munster's prowess, we added LOUP to the Penn New Frontier Fund at $26.61 per share. New Frontier Fund Top Ten Loup Holdings The content of this report reflects the personal views, opinions, and research of Penn Wealth Publishing. While measures are taken to help assure the accuracy of data, no guarantees can be made and the firm is not liable for any losses incurred by subscribers. This is not a solicitation to buy. Always consult your investment professional before investing any money.

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