In the world of ETFs, First Trust has recently unveiled a new thematic equity ETF called the First Trust Bloomberg R&D Leaders ETF (RND US). This ETF provides exposure to companies that consistently reinvest in their own growth. The fund is linked to the Bloomberg R&D Leaders Select Index, which selects its constituents from the largest 1,000 stocks listed and domiciled in the United States. The index screens for companies that have consistently increased their R&D expenditures over three consecutive years and possess R&D-to-sales ratios within the top 10% of the initial universe. The 50 largest stocks are selected and weighted according to float-adjusted market capitalization, with a weighting cap of 8% for the five largest companies and 4% for any other company. The exposure to any single sector is limited to 40%.
As of May 8th, the largest sector exposures of the First Trust Bloomberg R&D Leaders ETF were information technology (41.1%), consumer discretionary (17.7%), health care (15.5%), and communication services (12.3%). Some notable positions in the ETF included Apple (8.5%), Amazon.com (8.3%), NVIDIA (8.0%), Microsoft (7.8%), Meta Platforms (7.8%), Alphabet (4.5%), Eli Lilly (4.0%), and Tesla (4.0%).
Investors interested in the First Trust Bloomberg R&D Leaders ETF (RND US) can find more information on the First Trust website, where they can explore the fund's investment strategy, holdings, and performance.
First Trust's launch of the R&D Leaders ETF expands their range of thematic equity offerings, providing investors with another option to gain exposure to companies that prioritize research and development as a key driver of growth.
When considering investments in ETFs, it is important for investors to conduct thorough research, evaluate the fund's investment strategy and holdings, and consider their investment goals and risk tolerance. By doing so, investors can make informed decisions and position themselves for potential growth in the equity market.