As the sun sets over New York Harbor on a clear October evening, a party is in full swing on the 31st floor of a skyscraper a few blocks from Wall Street. The view from the floor-to-ceiling windows is partially obstructed by a four-foot tall, 120-pound 3-D printed jet black bull, its head framed against the flaming orange sky.

Hollow on the inside, the bull was assembled from blocks, giving it the look of a cubist painting come to life. It’s a gift from the host of the celebration, exchange operator Bats Global Markets Inc., to the guest of honor, Ark Investment Management, which launched an exchange-traded fund that tracks the 3-D printing industry. The fund, called The 3D Printing ETF, is listed on Bats under the symbol PRNT. Ark will add a glass surface to the bull, “turning it into a standing desk for our analysts,” Ark Chief Executive Officer Catherine Wood tells Bats CEO Chris Concannon.

As guests mingle, each wearing a 3-D printed name tag with the green Bats logo, a steady squeal comes from a corner. A 3-D printer is producing party favors: mini bulls.

Fun House

That the soiree is even taking place would’ve seemed ludicrous 10 years ago. Yet here we are. So why the brouhaha over a fund that invests in 3-D printing? It’s part of a growing, controversial cohort that’s unsettling the portfolio management business.

Welcome to the fun house world of niche ETFs, with their laser focus on single themes or industries. Other offerings this year include a Drone Economy Strategy ETF from PureFunds, which began trading in March, an Internet of Things Thematic ETF from Global X, which went live in September, and an ETF dedicated to investing in liquor, the Spirited Funds/ETFMG Whiskey and Spirits ETF, which hit the market on Oct. 12 with the apt ticker symbol WSKY.

The challenge for thematic funds and others looking to crack the $2.7 trillion ETF industry is how to stand out in a crowded field. Of the 2,270 niche funds launched in the past decade, nearly half have below $50 million in assets, a relatively paltry sum, and about 16 percent have been liquidated.

Clogging The System

The appeal of a fund devoted to whiskey and spirits is obvious, said David Bolton, president and CEO of Spirited Funds, which created the WSKY product.

“People want to invest in what they know and like,” said Bolton in an interview at Bloomberg LP’s headquarters in New York. “I think the story of whiskey speaks for itself. People understand it like that,” he said, snapping his fingers.