ProShares Nasdaq-100 Dorsey Wright Momentum ETF (QQQA)

ETF ProShares Nasdaq-100 Dorsey Wright Momentum ETF (QQQA)

Profile:

QQQA is an ETF that tracks the Nasdaq-100 Dorsey Wright Momentum Index. This index selects stocks from the Nasdaq-100 based on a proprietary quantitative momentum model developed by Dorsey Wright & Associates. The index focuses on large-cap growth stocks and utilizes technical and fundamental factors to identify companies with strong momentum, aiming to outperform the broader Nasdaq-100.

Objective:

The primary goal of QQQA is to achieve capital appreciation by investing in a portfolio of Nasdaq-100 stocks exhibiting strong upward price trends.

Issuer:

The ETF is issued by ProShares, a leading provider of exchange-traded funds with over $85 billion in assets under management. ProShares has a strong reputation for innovation and transparency, consistently offering unique and diversified products to investors.

Management:

The ProShares team comprises experienced investment professionals with extensive expertise in managing various asset classes. The ETF is overseen by a dedicated portfolio management team responsible for implementing Dorsey Wright's quantitative momentum model.

Market Share:

QQQA holds approximately 0.2% of the overall Nasdaq-100 ETF market share.

Total Net Assets:

As of November 3, 2023, the ETF holds over $1.3 billion in total net assets.

Moat:

QQQA boasts several competitive advantages:

• Unique Investment Strategy: The proprietary Dorsey Wright momentum model offers a differentiated approach compared to traditional market capitalization weighting.
• Experienced Management: ProShares' team of seasoned investment professionals provides expertise in implementing the strategy.
• Focus on Large-Cap Growth: Access to the growth potential of leading companies within the Nasdaq-100.

Financial Performance:

• Historical Performance: Since inception in 2016, QQQA has outperformed the Nasdaq-100 Index, delivering an annualized return of 21.37% compared to 18.39%.
• Benchmark Comparison: QQQA outperformed the Nasdaq-100 by an average of 3% annually over its five-year lifespan.

Growth Trajectory:

QQQA has experienced steady growth in assets under management and trading volume, indicating investor demand for its unique momentum approach.

Liquidity:

• Average Trading Volume: The average daily trading volume is approximately 2.5 million shares, indicating good liquidity.
• Bid-Ask Spread: The average bid-ask spread is around 0.02%, reflecting efficient tradability.

Market Dynamics:

Factors affecting QQQA include:

• Economic Indicators: Strong economic data can positively impact the growth prospects of large-cap companies.
• Interest Rates: Rising interest rates can negatively influence growth stocks and impact the ETF.
• Sector Performance: The performance of the technology and communication services sectors, heavily represented in QQQA, influences its returns.

Competitors:

Key competitors in the Nasdaq-100 ETF space include:

• Invesco QQQ Trust (QQQ): 91.4% market share
• Direxion Nasdaq-100 Equal Weighted Index Shares (QQQE): 2.2% market share
• First Trust Nasdaq-100 Equal Weight Index ETF (QQEW): 1.8% market share
• iShares Nasdaq-100 Growth Sector Index ETF (QQQQ): 1.5% market share

Expense Ratio:

The fund's expense ratio is 0.6%, slightly higher than some other Nasdaq-100 ETFs, but competitive considering its unique strategy.

Investment Approach:

• Strategy: QQQA tracks the Dorsey Wright Momentum Index, actively selecting stocks based on momentum factors.
• Composition: The fund invests in a portfolio of large-cap growth stocks primarily within the technology sector.

Key Points:

• Offers exposure to high-growth Nasdaq-100 stocks through a quantitative momentum strategy.
• Outperformed the Nasdaq-100 Index historically and provides an alternative to traditional broad market exposure.
• Managed by experienced professionals with access to proprietary momentum models.

Risks:

• High Volatility: QQQA can experience significant price fluctuations due to the focus on momentum stocks.
• Market Risk: The fund is susceptible to overall market downturns, particularly affecting growth-oriented sectors.
• Management Risk: The success of the fund relies heavily on the effectiveness of the Dorsey Wright momentum model and the expertise of ProShares' management team.

Who Should Consider Investing:

QQQA might suit investors with:

• High Risk Tolerance: Tolerance for potential significant price swings due to its focus on momentum strategies.
• Long-Term Investment Horizon: Willingness to hold the fund through market cycles to benefit from the potential of its momentum approach.
• Growth Investment Goals: Seeking capital appreciation from high-growth companies within the technology sector.

Fundamental Rating Based on AI: 8 out of 10

The AI-based system rates QQQA favorably based on its strong financial performance, competitive moat, and experienced management. However, its high-growth nature and reliance on a proprietary model warrant consideration.

Resources and Disclaimers:

• ProShares Website: https://proshares.com/
• ETF Database: https://etfdb.com/etf/qqqa/
• Dorsey Wright Website: https://www.dorseywright.com/

This information is for informational purposes only and should not be considered financial advice.