After partnering with Innovator Management, the IBD can now be accessed through an ETF wrapper in the form of the Innovator IBD 50 Fund (NYSEArca: FFTY).

FFTY adheres to the CAN SLIM formula pioneered by IBD founder William J. O’Neil. CAN SLIM combines traits such as a company’s current and annual earnings (rising of course), new, innovative products, leadership in a given industry, increased institutional ownership and other factors.

Bond explained that FFTY follows a high turnover, with the underlying portfolio rebalancing on a weekly basis. The so-called IBD 50 picks are constantly being updated, and if the average retail investor were to adhere to the formula, he or she would likely incur hefty trading costs and deal with the tax fallout in executing the trades. On the other hand, the ETF is seen as a cost-effective and efficient way to access IBD’s investing methodology.

Innovator has also come out with the Innovator IBD ETF Leaders ETF (LDRS), a kind of ETF-of-ETFs that 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.

For more ETF-related commentary from Tom Lydon and other industry experts, visit our video category.

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