R&D Spending and Performance - R&D spending has significantly increased in the 21st century, with total R&D spending in the Nasdaq Global Large Cap™ Index tripling from $342 billion in 2008 to over $1 trillion by 2023 [1] - The top quartile of R&D spenders increased their R&D as a percentage of sales from approximately 13% in 2008 to around 18% in 2024, reinvesting six times more of their revenue into R&D compared to the bottom three quartiles [1] - Companies in the top quartile experienced revenue growth of approximately 115%, compared to 27% for others, indicating a strong correlation between R&D intensity and revenue growth [1] - An equal-weighted portfolio of top R&D spenders outperformed bottom spenders by about three times, achieving a total return of 713% versus 271% from July 2009 to December 2024 [1] - Companies in the bottom three quartiles of R&D spending showed performance nearly identical to those that spent nothing on R&D, suggesting that R&D intensity is more critical than nominal spending [1] Nasdaq International Patent Leaders Index (NQIPL) - The NQIPL consists of the top 100 companies ranked by patent valuation in the Nasdaq Global Ex United States Large Mid Cap™ Index, capturing over 80% of aggregate patent value generated outside the US [4] - The index was launched on June 24, 2024, to provide a benchmark for innovation-driven companies based outside the US, reflecting significant international R&D spending and patent filings [4] - As of June 30, 2025, the NQIPL had a price-to-earnings ratio of 17.6, which is 28% lower than the S&P 500, indicating a valuation discount for innovative companies outside the US [19] - The index's top 20 constituents represent approximately 65% of total exposure, including major companies like Taiwan Semiconductor and Tencent, with a combined market value of $5.4 trillion as of June 30, 2025 [13] Geographic and Sector Exposure - The NQIPL has a significant concentration in Japan, which accounts for nearly 25% of the index weight, with major companies like Sony and Toyota leading in patent development [11] - Technology companies make up about 36% of the index weight, followed by Industrials at 18%, and Consumer Discretionary and Healthcare at 14% each, reflecting a focus on innovation-driven sectors [12] - The index has shown a trend of increasing exposure to Taiwan, South Korea, and China, while Japan and Switzerland's exposure has generally trended lower [24] Performance Analysis - Since its launch, the NQIPL has generated a price return of 11.3% and a total return of 13.9%, with significant contributions from Technology and Industrials sectors [15] - In the first half of 2025, the NQIPL achieved a price return of 15.8%, slightly outperforming the MSCI ACWI Ex-USA [16] - Backtested performance from June 21, 2013, to June 21, 2024, indicates a total return of 202%, significantly outperforming leading international equity benchmarks [21]