ProShares S&P Kensho Smart Factories ETF (MAKX)
The ProShares S&P Kensho Smart Factories ETF (MAKX) is an exchange-traded fund that holds companies across the manufacturing supply chain that benefit from automation, robotics, industrial artificial intelligence, and the digitization of factories and logistics.
That framing guides MAKX. The fund does not bet on a single company or technology. Instead it captures the structural shift toward automated, data-driven manufacturing—the hardware makers (ABB, Rockwell Automation, Fanuc), the software platforms (Siemens, Synopsys), the pure-play robotics firms, the companies supplying vision systems and sensors, and the logistics companies optimizing supply chains through artificial intelligence.
The supply-chain lens
MAKX works backward from the “smart factory” vision. At the core sit robots and automation controllers—companies like Fanuc and Universal Robots. Around them, a ecosystem of hardware and software: vision systems to guide robots, industrial artificial intelligence to optimize production, edge computing for real-time decision-making in the factory floor. Further out, digital twins and industrial software platforms (Siemens, Dassault, Autodesk) that let engineers design and simulate factories before building them. And at the edges, supply-chain software and predictive analytics that feed data forward and backward through the production network.
MAKX holds not just the headline robotics names but the fuller ecosystem. A maker of optical sensors for factory floors, a company selling software to optimize production scheduling, a logistics firm using machine learning to route trucks more efficiently—all are candidates. The selection comes from the S&P Kensho Smart Factories Index, an algorithm-selected basket of around 30 to 40 stocks that S&P Dow Jones (together with Kensho, now part of S&P) identifies as meaningfully exposed to factory automation and industrial transformation.
Why the Kensho index and not a traditional sector index
A traditional manufacturing or industrials index includes heavy equipment makers, commodity chemical firms, utilities, and others with minimal exposure to factory automation. The Kensho methodology uses machine learning to sift through the universe of US-listed companies, identify which ones have meaningful business lines exposed to automation trends, and weight them accordingly.
This is more narrowly focused than owning all industrials but far more diversified than owning only pure-play robotics makers (which are few and often small). The tradeoff is that the index is reconstituted regularly—as companies’ business descriptions change or their automation exposure rises or falls—so MAKX’s holdings shift more frequently than a traditional index-tracking fund would. This adds some operational overhead and transaction costs, but it also means the fund is actively refreshing its view of which companies are truly exposed to the automation theme.
Composition and what it holds
MAKX typically holds around 30 to 40 stocks, ranging from very large (Siemens, a German diversified industrial conglomerate with huge software and automation divisions) to mid-sized (Rockwell Automation, a pure-play industrial automation software house) to smaller specialized firms (vision-system makers, logistics software developers). The weight of each stock varies with its market capitalization and the index methodology; the largest holdings may represent 3 to 5 per cent of the fund, with most positions much smaller.
The geographic concentration is important: many of MAKX’s holdings are based in the United States, but the index explicitly includes non-US companies with significant US listings (European names like Siemens, Swiss names like ABB). A shareholder is not just betting on US factory automation but on the global wave of industrial digitization.
The temporal exposure is mixed. Some companies in MAKX (semiconductor equipment makers, for example) are already mature and profitable; others are early-stage, unprofitable, or highly cyclical (industrial robots sales rise and fall with manufacturing capex cycles, which rise and fall with economic cycles).
The bull case: macro tailwinds
MAKX rides several powerful trends. Ageing workforces in developed economies make automation increasingly attractive for manufacturers who cannot find workers. Reshoring (the return of manufacturing from Asia to the United States and Europe for geopolitical resilience) drives capex in domestic factories that often choose automation to offset higher labor costs. Supply-chain disruptions (revealed during COVID and persisting in some sectors) push companies toward resilience, which automation and software-based visibility help enable. And generative AI applied to factory scheduling, quality control, and predictive maintenance is unlocking new use cases that were not economical before.
For a long-term investor betting that developed economies will become more automated and advanced over the next decade, MAKX offers diversified exposure to the theme without the single-company risk of a stock like Fanuc or Nvidia.
The risks and cyclicality
Manufacturing is cyclical. When the economy slows, companies defer factory upgrades and new capex, hitting the demand for robots and automation software. MAKX will decline sharply in a recession even if the long-term story remains intact. The 2023–2024 period saw industrial automation orders soften as capex budgets tightened, and MAKX shareholders felt it.
Second, MAKX holds many small-cap and mid-cap names with lower liquidity and higher volatility than broad market indices. Individual positions can be hit by company-specific news (supply-chain problems, a failed product launch, management changes) that have nothing to do with the broader automation theme. Diversification within the fund is helpful but not perfect; a true disaster at a major holding can move the whole fund.
Third, the Kensho index methodology, while sophisticated, is not transparent in the way a traditional index is. Investors do not always know what criteria will trigger a company’s inclusion or exclusion, and the index can shift materially at each reconstitution. This creates mild tracking drift and makes the fund harder to understand than a simple “all automation stocks” approach.
Fourth, many of MAKX’s holdings are capital-intensive industrial businesses with modest returns on invested capital. They do not grow revenue dramatically, and their profit margins are compressed by competition. This is very different from software or cloud infrastructure plays; MAKX is not a high-growth fund, even though it holds exposure to high-growth technologies (AI, robotics, software).
Competition and the evolution of automation
MAKX is not alone in tracking this theme. Competitors exist (e.g., other automation-themed ETFs from other sponsors), and the broad industrial and software ETF markets overlap with some of MAKX’s exposure. More fundamentally, the companies MAKX holds are competing with each other: industrial software platforms compete with outsiders; robotics makers compete with lower-cost Asian rivals; vision-system companies compete with newcomers using cheaper cameras and AI.
The field is also shifting. Software companies entering the space from the cloud, artificial intelligence applied to manufacturing outside the traditional industrial software houses, and the rise of smaller, cheaper robots designed for small businesses all threaten to disrupt the incumbents in MAKX’s portfolio. The fund is not static; it is a stake in an evolving ecosystem, not a lock on the future.
How to research and monitor MAKX
Begin with ProShares’ documentation on the S&P Kensho Smart Factories Index. Understand what the index rules are, how frequently it reconstitutes, and what the current top 10 holdings are. Review those holdings individually to get a sense of the diversification: are they mostly US-listed robotics makers, or is the spread genuine (sensors, software, logistics)?
Monitor manufacturing capex trends and industrial purchasing manager indices—these leading indicators predict demand for the kinds of products MAKX’s companies make. When capex is strong, MAKX usually outperforms; when it turns negative, MAKX tends to lag.
Watch the fund’s expense ratio (typically moderate, reflecting the active index management) and track its performance relative to a broad industrials fund and relative to specific automation plays (Fanuc, Rockwell Automation, NVIDIA’s industrial segments). Over rolling one-year and five-year periods, compare returns and volatility. If MAKX is not outperforming a simple industrials index despite its specialization, consider whether the added complexity is paying off for your portfolio.
Finally, understand that MAKX is most suitable for investors with a 5+ year time horizon who believe factory automation will be a defining theme of economic development. For traders or those uncomfortable with cyclical holdings, a software-focused or AI-focused fund may be more comfortable. For those building a thematic tech exposure, MAKX complements (rather than replaces) a portfolio that already includes artificial intelligence and semiconductor exposure.