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Should Invesco NASDAQ Next Gen 100 ETF (QQQJ) Be on Your Investing Radar?
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Launched on 10/13/2020, the Invesco NASDAQ Next Gen 100 ETF (QQQJ - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $681.81 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that find themselves in the large cap category 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.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
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 0.76%.
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 37.90% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Applovin Corp (APP - Free Report) accounts for about 3.20% of total assets, followed by Monolithic Power Systems Inc (MPWR - Free Report) and Alnylam Pharmaceuticals Inc (ALNY - Free Report) .
The top 10 holdings account for about 20.25% of total assets under management.
Performance and Risk
QQQJ seeks to match the performance of the NASDAQ NEXT GENERATION 100 INDEX before fees and expenses. The NASDAQ Next Generation 100 Index comprises of securities of the next generation of Nasdaq-listed non-financial companies; that is, the largest 100 Nasdaq-listed companies outside of the NASDAQ-100 Index.
The ETF return is roughly 19.38% so far this year and it's up approximately 30.21% in the last one year (as of 11/29/2024). In the past 52-week period, it has traded between $25.12 and $32.10.
The ETF has a beta of 1.12 and standard deviation of 23.15% for the trailing three-year period. With about 104 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco NASDAQ Next Gen 100 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, QQQJ is a sufficient option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $150.29 billion in assets, Invesco QQQ has $311.10 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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 Next Gen 100 ETF (QQQJ) Be on Your Investing Radar?
Launched on 10/13/2020, the Invesco NASDAQ Next Gen 100 ETF (QQQJ - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $681.81 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that find themselves in the large cap category 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.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
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 0.76%.
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 37.90% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Applovin Corp (APP - Free Report) accounts for about 3.20% of total assets, followed by Monolithic Power Systems Inc (MPWR - Free Report) and Alnylam Pharmaceuticals Inc (ALNY - Free Report) .
The top 10 holdings account for about 20.25% of total assets under management.
Performance and Risk
QQQJ seeks to match the performance of the NASDAQ NEXT GENERATION 100 INDEX before fees and expenses. The NASDAQ Next Generation 100 Index comprises of securities of the next generation of Nasdaq-listed non-financial companies; that is, the largest 100 Nasdaq-listed companies outside of the NASDAQ-100 Index.
The ETF return is roughly 19.38% so far this year and it's up approximately 30.21% in the last one year (as of 11/29/2024). In the past 52-week period, it has traded between $25.12 and $32.10.
The ETF has a beta of 1.12 and standard deviation of 23.15% for the trailing three-year period. With about 104 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco NASDAQ Next Gen 100 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, QQQJ is a sufficient option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $150.29 billion in assets, Invesco QQQ has $311.10 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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.