Alger Launches Russell Innovation ETF To Capitalize On Emerging Innovators

On Tuesday, Alger launched the Alger Russell Innovation ETF INVN, another addition to its lineup of funds aiming to cash in on transformative market opportunities.

The ETF comes with an expense ratio of 0.55% and mirrors the Alger Russell Innovation Index, which focuses on innovative underdogs with high potential. At least 80% of the fund’s total assets are invested in securities of the Alger Russell Innovation Index, according to the fund’s prospectus.

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BioMarin Pharmaceutical Inc. BMRN, Teradata Corporation TDC, and Bristol-Myers Squibb Company BMY are among the top holdings, accounting for 2.11%, 2.01%, and 2.03% as of Jan. 7. The fund’s portfolio consists of about 50 holdings.

The index uses a quantitative methodology to identify innovation-driven equities, shortlists them based on lower cash flow margins and then ranks them based on research and development expenditures. The top 50 companies on this ranking are then selected, with each stock constituting around 2% of the portfolio.

Brad Neuman, CFA, Alger's Director of Market Strategy, thinks that this approach could bring innovation “out of the shadow of financial statements” and into accessible investment instruments.

The launch of INVN makes it the sixth Alger ETF available on U.S. markets. Among its other offerings, the Alger Mid Cap 40 ETF FRTY stands out with over $70 million in assets under management.

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