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Should Invesco NASDAQ Next Gen 100 ETF (QQQJ) Be on Your Investing Radar?
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If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Invesco NASDAQ Next Gen 100 ETF (QQQJ - Free Report) , a passively managed exchange traded fund launched on 10/13/2020.
The fund is sponsored by Invesco. It has amassed assets over $758.70 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 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.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 0.75%.
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 32.40% 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 2.94% of total assets, followed by On Semiconductor Corp (ON - Free Report) and Trade Desk Inc/the (TTD - Free Report) .
The top 10 holdings account for about 19.21% 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 added about 0.54% so far this year and is down about -23.81% in the last one year (as of 01/06/2023). In the past 52-week period, it has traded between $21.65 and $31.95.
The ETF has a beta of 1.08 and standard deviation of 26.52% for the trailing three-year period. With about 99 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 $66.47 billion in assets, Invesco QQQ has $143.33 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 Next Gen 100 ETF (QQQJ) Be on Your Investing Radar?
If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Invesco NASDAQ Next Gen 100 ETF (QQQJ - Free Report) , a passively managed exchange traded fund launched on 10/13/2020.
The fund is sponsored by Invesco. It has amassed assets over $758.70 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 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.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 0.75%.
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 32.40% 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 2.94% of total assets, followed by On Semiconductor Corp (ON - Free Report) and Trade Desk Inc/the (TTD - Free Report) .
The top 10 holdings account for about 19.21% 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 added about 0.54% so far this year and is down about -23.81% in the last one year (as of 01/06/2023). In the past 52-week period, it has traded between $21.65 and $31.95.
The ETF has a beta of 1.08 and standard deviation of 26.52% for the trailing three-year period. With about 99 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 $66.47 billion in assets, Invesco QQQ has $143.33 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.