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5 Stocks Powering the $1B NASDAQ Next Gen ETF (QQQJ)

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Invesco NASDAQ Next Gen 100 Fund (QQQJ - Free Report) , a QQQ Innovation Suite, has been gaining immense popularity driven by the hunt for the next technology leaders. Per Bloomberg, the ETF topped the $1 billion AUM milestone in just four months of its debut.

QQQJ in Focus

This fund tracks the NASDAQ Next Generation 100 Index, which comprises securities of the next generation of Nasdaq-listed non-financial companies that means the largest 100 Nasdaq-listed companies outside of the NASDAQ-100 Index. In total, the product holds 105 securities and may have a tilt toward the mid caps with each security holding no more than 3% share. This suggests a nice balance across each security and prevents heavy concentration (read: 7 Nasdaq ETFs to Play the Index's Winning Momentum).

Information technology takes the largest share at 43.2% while healthcare, communication services, and consumer discretionary round off the next three spots with a double-digit allocation each. The ETF charges 15 bps in annual fees and sees a good trading volume of nearly 900,000 shares a day.

Inside The Popularity

The mega-cap and large cap growth stocks had a stellar run in 2020 that has made their valuations expensive. Now, investors are betting on the next wave of companies that could be the biggest gainers this year. According to Invesco, QQQJ is populated by mid-cap stocks that “may have potential to join the Nasdaq 100 one day” as it invests in the 101st to the 200th largest companies on the NASDAQ.

The wider rollout of COVID-19 vaccines and hopes of fresh U.S. stimulus spurred the expectation for a speedy economic recovery. This has set the stage for the stocks, especially the growth ones, to move further higher (read: A Bunch of Top-Ranked Growth ETFs Hitting New Highs).

As such, QQQJ has soared 40% since its October low compared to a gain of 25% for Invesco QQQ (QQQ - Free Report) in the same timeframe. Though most of the stocks in the fund’s portfolio have delivered astounding returns over the past three months, a few were the real stars. Below we have highlighted the five best-performing stocks:

Best Performing Stocks of QQQJ

Bilibili Inc. Sponsored ADR (BILI - Free Report) : This New York-based company provides online entertainment platform primarily in China. BILI occupies the seventh position in the fund’s basket with 1.5% allocation. It has gained about 211% over the past three months. The stock has a Zacks Rank #5 (Strong Sell).

Roku Inc. (ROKU - Free Report) : This California-based company is the leading TV streaming platform provider in the United States based on the hours streamed. It has gained more than 102% in the past three months. The stock occupies the top position with 2.9% share in QQQJ. It has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

IACInterActiveCorp (IAC - Free Report) : This New York City-based company operates as a media and Internet company worldwide. The stock makes up for 1.2% allocation in the fund’s portfolio. It has also delivered incredible returns of about 93% in the same time frame. The stock has a Zacks Rank #3 (Hold).

Discovery Inc. (DISCA - Free Report) : This Maryland-based company operates as a media company in the United States and internationally. It makes up for 0.4% of the assets in QQQJ and has gained about 93% over the past three months. The stock has a Zacks Rank #3 (read: Ultra-Popular QQQ ETF Expands Its Family).

ViacomCBS Inc. (VIAC - Free Report) : This New York-based company is a leading global media and entertainment company. The stock has surged nearly 81% in the same time frame. It currently carries a Zacks Rank #4 (Sell) and takes the fourth spot, accounting for 1.9% of total assets.

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