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Should Invesco NASDAQ 100 ETF (QQQM) Be on Your Investing Radar?
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Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Invesco NASDAQ 100 ETF (QQQM - Free Report) is a passively managed exchange traded fund launched on 10/13/2020.
The fund is sponsored by Invesco. It has amassed assets over $15.33 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Also, growth stocks are a type of equity that carries more risk compared to others. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.63%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 50% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 11.06% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Amazon.com Inc (AMZN - Free Report) .
The top 10 holdings account for about 49.11% of total assets under management.
Performance and Risk
QQQM seeks to match the performance of the NASDAQ-100 INDEX before fees and expenses. The NASDAQ-100 Index includes securities of 100 of the largest domestic and international nonfinancial companies listed on Nasdaq.
The ETF has added about 42.75% so far this year and was up about 34.74% in the last one year (as of 11/13/2023). In the past 52-week period, it has traded between $107 and $158.70.
The ETF has a beta of 1.16 and standard deviation of 23.58% for the trailing three-year period. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco NASDAQ 100 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, QQQM is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $95.55 billion in assets, Invesco QQQ has $210.90 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should Invesco NASDAQ 100 ETF (QQQM) Be on Your Investing Radar?
Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Invesco NASDAQ 100 ETF (QQQM - Free Report) is a passively managed exchange traded fund launched on 10/13/2020.
The fund is sponsored by Invesco. It has amassed assets over $15.33 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Also, growth stocks are a type of equity that carries more risk compared to others. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.63%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 50% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 11.06% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Amazon.com Inc (AMZN - Free Report) .
The top 10 holdings account for about 49.11% of total assets under management.
Performance and Risk
QQQM seeks to match the performance of the NASDAQ-100 INDEX before fees and expenses. The NASDAQ-100 Index includes securities of 100 of the largest domestic and international nonfinancial companies listed on Nasdaq.
The ETF has added about 42.75% so far this year and was up about 34.74% in the last one year (as of 11/13/2023). In the past 52-week period, it has traded between $107 and $158.70.
The ETF has a beta of 1.16 and standard deviation of 23.58% for the trailing three-year period. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco NASDAQ 100 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, QQQM is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $95.55 billion in assets, Invesco QQQ has $210.90 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.