Nanotechnology stocks have taken a tumble this autumn, with a couple of particularly troubled stocks compounding the problems of a generally weak market in technology stocks.

Credit: LUX RES.

The Lux Nanotech Index, which comprises companies supplying nanotechnology products as well as some major industrial companies that rely heavily on nanotechnology, dipped close to its lowest point since 2003 at the end of last month.

“The index has been down, like the broader market,” says Peter Hebert of New York-based Lux Research, which compiles the index, adding that he thinks it will rise again soon. Hebert's company has just launched a fund called the PowerShares Lux Nanotech Portfolio, which will allow investors to track the performance of the index.

The weakest performers over the past two months included Skyepharma, a supplier of nanotech-based drug delivery systems based in London, and Headwaters, whose main subsidiary, Nanokinetix of New Jersey, makes catalyst components.

Skyepharma announced “disastrous” first-half results in September, Hebert says, and a share offering failed to attract buyers at the anticipated price, causing its shares to dive. Headwaters fell back sharply from a short-lived summer peak attained on a good set of financial results.

Hebert predicts that stock in the companies represented by the index will move up again “as nanotechnology becomes a significant component of their businesses”, and says that subdued stock prices make this a good time to get into the new fund.