Innovator Capital Management rolled out a fund-of-funds styled exchange traded fund that helps investors target market momentum through a relative-strength based smart beta indexing methodology.
On Thursday, Innovator Capital Management launched the Innovator IBD ETF Leaders ETF (LDRS), which has a 1.16% expense ratio, according to a prospectus sheet. The management fee of the ETF is 0.60% and the acquired fund fees are 0.56%, based on today’s underlying basket of ETFs, which may vary greatly over time due to monthly changes.
The Innovator IBD ETF Leaders ETF will try to reflect the performance of the IBD ETF Leaders Index, a rules-based index developed by Investor’s Business Daily to outperform the broader equity and fixed income markets.
IBD uses proprietary relative strength analysis to select various asset classes that show market-leading relative strength, including foreign and domestic equity and fixed income securities, along with other alternative asset classes.
The so-called relative strength is a technique that determines the strongest performing securities by measuring certain factors, like a security’s relative performance against the overall market or a security’s relative strength value, which is found by comparing the rate of increase of the security’s price versus to the broader benchmark index.