Back to top

Image: Bigstock

Should Invesco NASDAQ Next Gen 100 ETF (QQQJ) Be on Your Investing Radar?

Read MoreHide Full Article

Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Invesco NASDAQ Next Gen 100 ETF (QQQJ - 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 $847.70 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 fall in the large cap category tend to have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

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. 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.


Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

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 1.25%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 35.40% of the portfolio. Healthcare and Consumer Discretionary round out the top three.

Looking at individual holdings, Enphase Energy Inc (ENPH - Free Report) accounts for about 2.20% of total assets, followed by Costar Group Inc (CSGP - Free Report) and Coca-Cola Europacific Partners Plc (CCEP - Free Report) .

The top 10 holdings account for about 18.87% 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 has lost about -23.54% so far this year and is down about -24.59% in the last one year (as of 08/29/2022). In the past 52-week period, it has traded between $22.28 and $36.23.

The ETF has a beta of 1.13 and standard deviation of 25.79% for the trailing three-year period. With about 99 holdings, it effectively diversifies company-specific risk.


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 $75.33 billion in assets, Invesco QQQ has $171.24 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.


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.

Published in