Pacer ETFs has launched a new ETF targeting the most innovative companies in international equity markets, based on the estimated value of their patents.

Sean O’Hara, President of Pacer ETFs Distributors.

The Pacer Nasdaq International Patent Leaders ETF (PATN US) has been listed on Nasdaq with an expense ratio of 0.65%.

Pacer explains that traditional international equity ETFs often over-concentrate on sectors like financials and energy. In contrast, the PATN ETF offers a more growth-focused approach by targeting countries and sectors leading in research and development, particularly in technology, healthcare, and consumer discretionary.

Pacer highlights that patents are strong indicators of a company’s innovation and future potential, providing a unique perspective on market leadership.

The ETF may complement a Nasdaq 100 exposure, offering a broader global perspective for growth-oriented portfolios.

Sean O’Hara, President of Pacer ETF Distributors, commented: “Despite impressive innovation in international markets, investors lack options to capture this potential due to prolonged stagnation. By looking beyond traditional metrics and identifying international innovation leaders, we believe we can offer a better way to tap into ex-US growth for investors.”

Methodology

The fund is linked to the Nasdaq International Patent Leaders Index which selects its constituents from an initial universe comprising large and mid-cap stocks of companies domiciled in non-US developed market countries.

Independent data provider IPR Strategies ranks all eligible securities using a proprietary valuation model that quantifies intangible assets such as intellectual property and R&D activities, represented by a company’s patents. The model incorporates data from patent offices, corporate filings, and economic data, including historical patent transaction values, to estimate the patent portfolio’s worth.

The top 100 firms with the highest patent values are selected and weighted by market capitalization. The index is reconstituted and rebalanced semi-annually.