Stetson University, a private university in Florida, is getting into the drone business through the launch of a new index called “Drones 9,” which includes nine publicly traded companies with drone-related exposures.
The university says the index is a bold new idea from students who run Stetson’s Roland George Investments Program (RGIP), which empowers students to manage a real portfolio comprising $3.5 million in stocks and bonds. Trustees approved the purchase in March, clearing the way for the RGIP portfolio to invest $100,000 in the nine drone stocks.
“The drone industry is expected to have explosive growth,” states Gonzalo Arroyo-Baudet, a 2016 graduate who developed the concept behind Drones 9 while still a student. “More importantly, there is not a single company making an entire commercial drone. So, the real innovation is to invest in nine companies which make various components of the drones.”
“Our students are known for their original, independent and critical thinking skills,” comments K.C. Ma, Ph.D., director of Stetson’s George Investments Institute and the Roland and Sarah George Chair of Applied Investments for RGIP.
According to the university, Arroyo-Baudet identified nine tradable stocks in the U.S. and created a proprietary algorithm to determine the optimal combination of the nine stocks. Stetson claims the index has outperformed the S&P 500 by 50% for the last 10 years, and Arroyo-Baudet believes the drone industry will cumulatively generate more than $90 billion during the next decade.