THE STORY OF INNOVATION
Our methodology is grounded in decades of academic research, combining insights from leading economists and financial theorists.
Building upon the foundational work of Eugene Fama and Kenneth French, we extend their factor framework to include innovation-specific factors.
Incorporating research from Joseph Schumpeter's creative destruction theory and modern innovation economics literature.
Applying Everett Rogers' diffusion of innovations theory to identify companies at the forefront of technological adoption.
Leveraging patent citation networks and innovation metrics to quantify technological advancement and innovation potential.
Every major sector was once a breakthrough innovation. Technology started as "computing machines." Healthcare began with "modern medicine." What's next? Quantum computing? Gene therapy? Innovation factors identify these trends before they become sectors.
The railroads that built America? Now a tiny fraction of the market. Sugar refineries? Replaced by artificial sweeteners and health consciousness. Innovation factors avoid the "sector trap" by focusing on what's next, not what was.
Instead of betting on which sector will win, innovation factors bet on the companies that are creating the next sectors. While sector investors chase yesterday's winners, innovation investors own tomorrow's leaders.
Research and development spending as a percentage of revenue, weighted by industry benchmarks and historical innovation output.
Patent portfolio analysis including citation counts, technological impact, and forward-looking innovation potential.
Revenue growth, market share expansion, and adoption rates of new technologies and business models.
Concentration of highly skilled technical talent, innovation culture, and intellectual capital investment.
Ability to disrupt existing markets and create new ones, measured through market cap growth and competitive positioning.
Strategic positioning for emerging technologies, including AI, quantum computing, biotechnology, and clean energy.
Innovation factors don't just sound good on paper - they deliver results.
Our research demonstrates the persistent nature of innovation factors across different market cycles and economic conditions.
Innovation factors exhibit persistent risk-adjusted returns that outperform traditional factor strategies over time.
Artificial intelligence is transforming every industry, creating unprecedented opportunities for innovation-driven companies.
The transition to clean energy and sustainable technologies is driving massive investment in innovation across sectors.
Advances in biotechnology, genomics, and personalized medicine are creating new investment opportunities in innovation.
Join the future of factor investing with RED Diamond Brothers Innovation Factor ETF. Capture the innovation premium with rigorous methodology and academic foundation.