ETF issuer IndexIQ has announced the expansion of its ETF product line-up with the launch of three new equity-focused strategies: IQ US Large Cap R&D Leaders ETF (LRND); IQ US Mid Cap R&D Leaders ETF (MRND) and IQ Global Equity R&D Leaders ETF (WRND).
The funds are designed to offer exposure to the domestic and global companies, respectively, that are consistently reinvesting into their research and development activities, positioning themselves for future innovations and the expansion of existing capabilities.
LRND, MRND, and WRND seek to track to the price and yield performance of the IQ US Large Cap R&D Leaders Index, IQ US Mid Cap R&D Leaders Index, and IQ Global Equity R&D Leaders Index, respectively, the firm writes.
The universe of eligible securities begins with the Russell 1000 Index for the index underpinning LRND; the Russell Midcap Index for the index underpinning MRND; and the FTSE All-World Index for the index underpinning WRND. From there, the US-focused portfolios are narrowed down to include the top 100 equities based on R&D reinvestment, while the global portfolio includes the top 200 such equities. Portfolios are then weighted based on R&D reinvestment.
Salvatore Bruno, Chief Investment Officer with IndexIQ says: “Historically, companies that prioritise 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.”
Ian Forrest, Head of IndexIQ says: “We’re very excited to be expanding our equity ETF lineup with these timely new funds that provide investors with a new lens to understand and act on key trends that can have the potential to provide a meaningful impact on a portfolio. These ETFs seek to offer investors powerful tools to construct better portfolios for clients and provide smart exposure to what we believe to be the best and most innovative companies.”