Invesco NASDAQ Next Gen 100 ETF (QQQJ)QQQJ

Invesco NASDAQ Next Gen 100 ETF (QQQJ)

Profile:

The Invesco NASDAQ Next Gen 100 ETF (QQQJ) is an exchange-traded fund that tracks the NASDAQ Next Gen 100 Index. This index comprises the next 100 largest non-financial companies listed on the Nasdaq Stock Market after the 100 constituents of the Nasdaq-100 Index. QQQJ primarily focuses on the growth and technology sectors, offering exposure to emerging companies with high growth potential.

Objective:

The ETF's primary investment goal is to achieve long-term capital appreciation by replicating the performance of the NASDAQ Next Gen 100 Index.

Issuer:

Invesco Ltd. (IVZ) is a global asset management company with over 80 years of experience and $1.4 trillion in assets under management as of 30 September 2023.

Reputation and Reliability: Invesco is a reputable and reliable asset manager with a strong track record in managing index-tracking ETFs.

Management: The ETF is managed by a team of experienced portfolio managers with expertise in the technology and growth sectors.

Market Share:

QQQJ has a market share of approximately 1.5% within the Technology Sector ETFs category.

Total Net Assets:

As of October 26, 2023, QQQJ has total net assets of approximately $6.8 billion.

Moat:

QQQJ's competitive advantages include:

• Unique strategy: The ETF focuses on the next generation of technology and growth companies, providing exposure to emerging trends.
• Superior Management: Invesco's experienced management team leverages its expertise to select high-potential companies for the index.
• Niche market focus: The ETF caters to investors seeking targeted exposure to the next wave of technology leaders.

Financial Performance:

Since its inception in April 2019, QQQJ has delivered a total return of over 100%. In the past year, the ETF has outperformed the NASDAQ-100 Index, reflecting its focus on high-growth companies.

Benchmark Comparison:

QQQJ has outperformed the NASDAQ-100 Index in the past year, demonstrating its ability to identify and invest in emerging technology leaders.

Growth Trajectory:

The ETF's holdings represent companies with strong growth potential, and the technology sector is expected to continue its growth trajectory in the coming years.

Liquidity:

QQQJ has an average daily trading volume of over 2 million shares, ensuring high liquidity for investors. The bid-ask spread is typically tight, minimizing transaction costs.

Market Dynamics:

Factors influencing QQQJ's market environment include:

• Economic Indicators: Strong economic growth and favorable interest rate policies support technology sector growth.
• Sector Growth Prospects: The technology sector is expected to remain a key driver of economic growth in the coming years.
• Current Market Conditions: Market volatility can impact the ETF's performance in the short term.

Competitors:

Key competitors in the Technology Sector ETFs category include:

• iShares Expanded Tech Sector ETF (IGV) - Market Share: 12%
• Technology Select Sector SPDR Fund (XLK) - Market Share: 10%
• Vanguard Information Technology ETF (VGT) - Market Share: 9%

Expense Ratio:

QQQJ has an expense ratio of 0.60%, which is competitive compared to other technology sector ETFs.

Investment Approach and Strategy:

• Strategy: The ETF passively tracks the NASDAQ Next Gen 100 Index, aiming to replicate its performance.
• Composition: QQQJ primarily holds stocks of technology and growth companies, with the top holdings including:
  • Marvell Technology Group
  • Cadence Design Systems
  • Fortinet
  • Microchip Technology
  • Keysight Technologies

Key Points:

• Invests in the next generation of technology and growth companies.
• Outperformed the NASDAQ-100 Index in the past year.
• High liquidity with tight bid-ask spread.
• Competitive expense ratio.

Risks:

• Volatility: The technology sector is known for its volatility, which can lead to significant price fluctuations.
• Market Risk: The ETF's performance is directly tied to the performance of its underlying holdings.
• Concentration Risk: The ETF has a high concentration in the technology sector, increasing its exposure to sector-specific risks.

Who Should Consider Investing:

QQQJ is suitable for investors seeking:

• Exposure to the next generation of technology leaders.
• Long-term capital appreciation through investment in high-growth companies.
• Diversification within their technology sector holdings.

Fundamental Rating Based on AI:

Based on an analysis of financial health, market position, and future prospects, QQQJ receives an AI-based fundamental rating of 8.5 out of 10. This rating considers the ETF's strong track record, competitive positioning, and exposure to a high-growth sector. However, investors should be aware of the associated volatility and market risks.

Resources and Disclaimer:

• Invesco NASDAQ Next Gen 100 ETF website: https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=QQQJ
• NASDAQ Next Gen 100 Index website: https://indexes.nasdaqomx.com/Index/Overview/NASDAQ-Next-Gen-100

Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Please consult with a qualified financial advisor before making any investment decisions.