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The tech-heavy Nasdaq Composite Index hit a record high in the last trading session, marking a five-week win streak. Solid corporate earnings and rate cut bets have been driving the stocks higher. In particular, blockbuster NVIDIA’s earnings spread huge optimism into the stock market last week and bolstered optimism over the global artificial intelligence (AI) boom. This supported Nasdaq’s move higher (read: AI Boom Bolsters NVIDIA's Q1 Growth: ETFs to Tap).
As such, the ETFs tracking the index are in focus. These include Invesco QQQ (QQQ - Free Report) , Invesco NASDAQ 100 ETF (QQQM - Free Report) , First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW - Free Report) , Invesco NASDAQ Next Gen 100 ETF (QQQJ - Free Report) and Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE - Free Report) .
Will the Rally Continue?
The expansion of AI applications holds the promise of ushering in fresh opportunities for growth in the tech sector and beyond. According to a new report by Grand View Research, the global artificial intelligence market is expected to witness a CAGR (2024-2030) of 36.6% to reach $811.75 billion by 2030
Per the latest survey from Bank of America, expectations of interest rate cuts rather than earnings optimism have made investors the "most bullish" since November 2021. About 82% of global fund managers expect the first rate cut by the Fed in the second half, while 78% say a recession is unlikely in the next 12 months.
However, concerns over stubborn inflation once again might halt the rally in the Index. This is because the Fed minutes and upbeat manufacturing data, both of which highlight concerns over stubborn inflation, have again pushed back the timing of rate cuts. Notably, the Treasury yields saw the best week in a month on indications that interest rates will need to remain higher for longer than expected.
While inflation has eased over the past year, it failed to show further progress toward the Fed’s 2% objective in recent months, per its latest minutes. As such, the disinflation process would likely take longer than previously thought. Meanwhile, U.S. business activity growth accelerated sharply to its fastest pace in more than two years in May after two months of slower growth led by an upturn in the service sector. The data indicates that the U.S. economy is back on course for another solid GDP gain in the second quarter. The strength in the economy could spark a revival in inflation (read: Interest Rate Hedge ETFs in Focus Post Fed Minutes).
Invesco QQQ provides exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. It is one of the largest and most popular ETFs in the large-cap space, with an AUM of $269.8 billion and an average daily volume of 38 million shares. Invesco QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Invesco NASDAQ 100 ETF is identical to QQQ, tracking the NASDAQ-100 Index, but comes with lower annual fees of 15 bps. It holds 103 securities in its basket, with a higher concentration on the top firm. Invesco NASDAQ 100 ETF has accumulated $25 billion in its asset base and trades in an average daily volume of 1.5 million shares. It has a Zacks ETF Rank #2.
First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW - Free Report)
Holding 101 stocks, First Trust NASDAQ-100 Equal Weighted Index Fund provides equal exposure to stocks on the Nasdaq-100 Equal Weighted Index. It has amassed $2.1 billion in its asset base while trading in moderate volumes of 87,000 shares a day, on average. First Trust NASDAQ-100 Equal Weighted Index Fund charges 57 bps in annual fees and carries a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: AI & Fed Driving Stock Market? ETFs to Bet On).
Invesco NASDAQ Next Gen 100 ETF follows the NASDAQ Next Generation 100 Index, which comprises securities of the next generation of Nasdaq-listed non-financial companies, i.e., the largest 100 Nasdaq-listed companies outside of the NASDAQ-100 Index. In total, the product holds 105 securities. Invesco NASDAQ Next Gen 100 ETF charges 15 bps in annual fees and sees a good trading volume of nearly 90,000 shares a day. With AUM of $674.2 million, QQQJ has a Zacks ETF Rank #3.
Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE - Free Report)
Direxion NASDAQ-100 Equal Weighted Index Shares provides an equal-weight exposure to the NASDAQ-100 Index by tracking the NASDAQ-100 Equal Weighted TR Index. It has amassed $1.2 billion and trades in an average daily volume of 189,000 shares. Direxion NASDAQ-100 Equal Weighted Index Shares charges 35 bps in annual fees and has a Zacks ETF Rank #3.
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What's in the Cards for Nasdaq ETFs?
The tech-heavy Nasdaq Composite Index hit a record high in the last trading session, marking a five-week win streak. Solid corporate earnings and rate cut bets have been driving the stocks higher. In particular, blockbuster NVIDIA’s earnings spread huge optimism into the stock market last week and bolstered optimism over the global artificial intelligence (AI) boom. This supported Nasdaq’s move higher (read: AI Boom Bolsters NVIDIA's Q1 Growth: ETFs to Tap).
As such, the ETFs tracking the index are in focus. These include Invesco QQQ (QQQ - Free Report) , Invesco NASDAQ 100 ETF (QQQM - Free Report) , First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW - Free Report) , Invesco NASDAQ Next Gen 100 ETF (QQQJ - Free Report) and Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE - Free Report) .
Will the Rally Continue?
The expansion of AI applications holds the promise of ushering in fresh opportunities for growth in the tech sector and beyond. According to a new report by Grand View Research, the global artificial intelligence market is expected to witness a CAGR (2024-2030) of 36.6% to reach $811.75 billion by 2030
Per the latest survey from Bank of America, expectations of interest rate cuts rather than earnings optimism have made investors the "most bullish" since November 2021. About 82% of global fund managers expect the first rate cut by the Fed in the second half, while 78% say a recession is unlikely in the next 12 months.
However, concerns over stubborn inflation once again might halt the rally in the Index. This is because the Fed minutes and upbeat manufacturing data, both of which highlight concerns over stubborn inflation, have again pushed back the timing of rate cuts. Notably, the Treasury yields saw the best week in a month on indications that interest rates will need to remain higher for longer than expected.
While inflation has eased over the past year, it failed to show further progress toward the Fed’s 2% objective in recent months, per its latest minutes. As such, the disinflation process would likely take longer than previously thought. Meanwhile, U.S. business activity growth accelerated sharply to its fastest pace in more than two years in May after two months of slower growth led by an upturn in the service sector. The data indicates that the U.S. economy is back on course for another solid GDP gain in the second quarter. The strength in the economy could spark a revival in inflation (read: Interest Rate Hedge ETFs in Focus Post Fed Minutes).
ETFs in Focus
Invesco QQQ (QQQ - Free Report)
Invesco QQQ provides exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. It is one of the largest and most popular ETFs in the large-cap space, with an AUM of $269.8 billion and an average daily volume of 38 million shares. Invesco QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Invesco NASDAQ 100 ETF (QQQM - Free Report)
Invesco NASDAQ 100 ETF is identical to QQQ, tracking the NASDAQ-100 Index, but comes with lower annual fees of 15 bps. It holds 103 securities in its basket, with a higher concentration on the top firm. Invesco NASDAQ 100 ETF has accumulated $25 billion in its asset base and trades in an average daily volume of 1.5 million shares. It has a Zacks ETF Rank #2.
First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW - Free Report)
Holding 101 stocks, First Trust NASDAQ-100 Equal Weighted Index Fund provides equal exposure to stocks on the Nasdaq-100 Equal Weighted Index. It has amassed $2.1 billion in its asset base while trading in moderate volumes of 87,000 shares a day, on average. First Trust NASDAQ-100 Equal Weighted Index Fund charges 57 bps in annual fees and carries a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: AI & Fed Driving Stock Market? ETFs to Bet On).
Invesco NASDAQ Next Gen 100 ETF (QQQJ - Free Report)
Invesco NASDAQ Next Gen 100 ETF follows the NASDAQ Next Generation 100 Index, which comprises securities of the next generation of Nasdaq-listed non-financial companies, i.e., the largest 100 Nasdaq-listed companies outside of the NASDAQ-100 Index. In total, the product holds 105 securities. Invesco NASDAQ Next Gen 100 ETF charges 15 bps in annual fees and sees a good trading volume of nearly 90,000 shares a day. With AUM of $674.2 million, QQQJ has a Zacks ETF Rank #3.
Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE - Free Report)
Direxion NASDAQ-100 Equal Weighted Index Shares provides an equal-weight exposure to the NASDAQ-100 Index by tracking the NASDAQ-100 Equal Weighted TR Index. It has amassed $1.2 billion and trades in an average daily volume of 189,000 shares. Direxion NASDAQ-100 Equal Weighted Index Shares charges 35 bps in annual fees and has a Zacks ETF Rank #3.