On Tuesday, Alger released the Alger Russell Innovation ETF (INVN ), the latest addition to Alger’s growing fund library.
INVN looks to provide results similar to that of the Alger Russell Innovation Index. The fund has a net expense ratio of 0.55%.
The Alger Russell Innovation Index looks to cultivate a portfolio of U.S. equities that the market has not yet recognized as innovative companies. Alger built this portfolio using a quantitative methodology.
Seeking Out Innovation
To build out its portfolio, the index first sorts out companies with lower cash flow margins. Afterward, it ranks companies based on their expenditures on research and development.
Once the stocks are ranked, the Alger index will select the top 50 companies for inclusion. Each of these equities will constitute 2% of the portfolio holdings.
“Innovation is accelerating change for businesses and transforming the economy, which means investors must think and act differently. One way to take advantage of this change is to allocate assets to innovation, which we believe has the potential to be an important component of investors’ portfolios,” noted Brad Neuman, CFA, Director of Market Strategy for Alger. “A fundamental change in how businesses pursue growth is upending conventional accounting practices, creating a need for new approaches to bring innovation out of the shadow of financial statements and into an accessible investing vehicle.”
INVN utilizes a full replication methodology, and will generally invest in each of the companies within the index. The fund may concentrate its sector investments to the same extent as the underlying index does. Per the fund prospectus, the index concentrates in the software industry, as of September 30, 2024.
Now available on the NYSE Arca, INVN marks the sixth Alger fund to now be available on U.S. markets. One of the company’s largest ETFs, the Alger Mid Cap 40 ETF (FRTY ), has over $70 million in assets under management.
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