On Wednesday, First Trust announced the launch of the First Trust Bloomberg R&D Leaders ETF (RND).
RND has a net expense ratio of 0.60%. The fund is benchmarked to the Bloomberg R&D Leaders Select Index.
The Bloomberg index selects assets in companies that are deemed to provide shareholder value through investing in the company’s growth. In particular, the selection process ideally includes companies that have increased spending in Research & Development sectors for at least three years in a row. Additionally, the index scrutinizes companies based on the portion of Sales revenue returned to R&D.
“We built the Bloomberg R&D Leaders Select Index to provide investors with the opportunity to explore the specific theme of companies committed to growth through research & development prioritization. We are excited to grow our relationship with First Trust as they continue to deliver differentiated products for their clients,” Allison Stone, Head of Multi-Asset Index Product Management at Bloomberg Index Services, added.
RND invests the wide majority of fund assets into constituents of the Bloomberg index. The fund aims to replicate the performance of the index through an indexing investment approach.
R&D Benefits
First Trust notes that companies expanding research into R&D operations can offer potential economic benefits down the line. Further, the firm asserts that growth in the Research & Development sector could lead to companies outperforming in sales and net income growth.
“Innovation is the critical engine of growth that powers the U.S. economy,” noted Ryan Issakainen, Senior Vice President and ETF Strategist at First Trust. “A common thread running through the most innovative companies is a commitment to research and development.”
The fund is among the latest additions to First Trust’s growing lineup of ETFs. First Trust currently has over 160 ETFs listed in the United States. These funds represent over $135 billion in assets under management.
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