IndexIQ launches suite of ‘R&D Leaders’ thematic ETFs

Feb 8th, 2022 | By | Category: Equities

Factor Investing Strategy Briefing - Thursday 29th June 2023 - The Connaught, Mayfair. Please join us for our annual smart beta and factor investing event, featuring Goldman Sachs Asset Management, FlexShares, First Trust, MSCI and WisdomTree. Please register now if you would like to attend.

IndexIQ, a subsidiary of New York Life Investments, has rolled out a trio of new thematic equity ETFs providing exposure to companies that are significantly investing in research and development.

Sal Bruno, Chief Investment Officer at IndexIQ.

Sal Bruno, Chief Investment Officer at IndexIQ.

The IQ US Large Cap R&D Leaders ETF (LRND US), IQ US Mid Cap R&D Leaders ETF (MRND US), and IQ Global Equity R&D Leaders ETF (WRND US) target innovative firms within US large-cap, US mid-cap, and global stock market universes.

LRND, MRND, and WRND have been listed on NYSE Arca with expense ratios of 0.14%, 0.16%, and 0.18%, respectively.

The ETFs are linked to proprietary indices that begin their construction process from mainstream parent indices provided by FTSE Russell, namely the Russell 1000 (US large-cap), Russell Midcap Index (US mid-cap), and FTSE All-World Index (global).

The US-focused indices each select the 100 companies with the highest dollar spending on research and development over the past year, while the global index targets the inclusion of 200 companies.

Constituents are weighted by their total spending on research and development while capping individual positions at 5%.

Salvatore Bruno, Chief Investment Officer at IndexIQ, said: “Historically, companies that prioritize investing into research and development have shown favorable tendencies towards outperformance. A greater focus on R&D may lead to greater opportunities for innovation and for key expansions of existing capabilities.

“However, investors have often had a difficult time assigning an accurate value to the R&D spending and thus have tended to undervalue its potential benefits. This suite was designed to provide investors and advisors with a powerful new set of tools for adding the most innovative companies, and the companies that are investing in future innovations with the potential to unlock future value, to their equity portfolios.”

Tags: , , , , , , , ,

Leave a Comment