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An Innovative ETF Of ETFs

December 22, 2017 12:02 pm
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Another exchange traded fund using the fund of funds of strategy debuted Thursday with the launch of the Innovator IBD ETF Leaders ETF (NYSE:LDRS). The new ETF is a partnership between Innovator Capital Management, LLC and Investor's Business Daily.

Innovator Capital Management was started by Bruce Bond and John Southard, the founders of PowerShares, which has grown into the fourth-largest U.S. ETF issuer. LDRS, the new ETF, follows the IBD Leaders ETF Index.

“Developed and managed by Investor’s Business Daily, the index is rules-based using proprietary relative strength analysis and other objective performance ratings to select ETFs across various asset classes and geographies that are demonstrating market-leading relative strength,” according to a statement.

More Details On LDRS

LDRS came to market with holdings comprised of 13 other ETFs from seven different issuers. U.S. and international equity funds combine for nearly 62 percent of the new ETF's roster, while ETFs focusing on emerging Asian economies, including China and Vietnam, account for the rest of the LDRS lineup.

LDRS' holdings range from standard fare such as the SPDR S&P 500 ETF (NYSE:SPY), the world's largest ETF, to more exotic fare such as the Robo Global Robotics & Automation ETF (NASDAQ:ROBO) and the VanEck Vectors Vietnam ETF (NYSE:VNM).

Other LDRS holdings include the Guggenheim Solar ETF (NYSE:TAN), SPDR S&P Homebuilders ETF (NYSE:XHB) and the iShares U.S. Home Construction ETF (NYSE:ITB).


LDRS' underlying index starts with a selection universe of all U.S.-listed ETFs, but that field is narrowed down by excluding funds with low trading volume and those ETFs that lagged the S&P 500 over the trailing 90 days.

“The remaining ETFs are ranked according IBD’s relative price strength rating methodology with the highest scoring ETFs included and equally weighted within the Index,” according to the statement. “Under normal circumstances, the index will be reconstituted and rebalanced on the last trading day of each month.”

The new ETF charges 1.16 percent per year.

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