VictoryShares Nasdaq Next 50 ETF (QQQN)

VictoryShares Nasdaq Next 50 ETF (QQQX)

Profile:

VictoryShares Nasdaq Next 50 ETF (QQQX) is an actively managed exchange-traded fund that invests in a diversified portfolio of 50 U.S. non-financial companies with a market capitalization between $1 billion and $10 billion. These companies are not included in the Nasdaq 100 Index, focusing on high-growth potential and disruptive innovation.

Investment Objective:

QQQX seeks to provide long-term capital appreciation by investing in a portfolio of emerging growth companies with the potential to become large-cap leaders.

Issuer:

The ETF is issued by VictoryShares, an investment firm focused on active and innovative ETF strategies. VictoryShares has a strong reputation in the industry and is known for its forward-thinking approach.

Management:

QQQX is actively managed by a team of experienced portfolio managers with expertise in selecting high-growth companies. The team's deep knowledge of the market and fundamental analysis drives the stock selection process.

Market Share:

With over $713 million in net assets (as of November 30, 2023), QQQX holds a small market share in the actively managed U.S. growth equity ETF space. However, its unique focus on non-Nasdaq 100 emerging growth companies differentiates it from other ETFs in the category.

Moat:

QQQX enjoys a competitive advantage with its access to exclusive research and data, enabling deeper insights into the disruptive potential of emerging companies. The active management approach allows for flexibility and customization of the portfolio beyond what a traditional index-based ETF can offer.

Financial Performance:

QQQX has delivered strong historical returns. Since its inception in November 2020, it has generated a cumulative return of over 70%, outperforming the benchmark Nasdaq Next Gen 50 Index.

Growth Trajectory:

The growth trends in technology, innovation, and new industries present a positive outlook for QQQX. The ETF's focus on these sectors positions it to benefit from the long-term growth potential of emerging companies.

Liquidity:

QQQX boasts high liquidity with an average daily trading volume exceeding 400,000 shares. This ensures investors can enter and exit positions efficiently. The bid-ask spread is also relatively tight, indicating low transaction costs.

Market Dynamics:

The ETF's performance is influenced by economic indicators, technology sector growth, and overall market sentiment. Technological advancements, evolving consumer behavior, and government policies towards innovation drive the growth of the underlying companies.

Competitors:

QQQX's key competitors include ARKG (ARK Innovation ETF) and QLG (Qualitarian Global Innovation Leaders ETF). These ETFs share similar themes of investing in disruptive innovation and high-growth companies, but differ in their specific investment strategies and underlying holdings.

Expense Ratio:

QQQX has an expense ratio of 0.75%, which is slightly higher than the average for actively managed growth ETFs. However, the active management and potential for outperformance can justify the higher expense ratio.

Investment Approach and Strategy:

The ETF uses an active stock selection process based on fundamental analysis, identifying companies with strong growth potential, disruptive technologies, and scalable business models. The portfolio composition mainly includes stocks of companies in the Technology, Healthcare, and Consumer Discretionary sectors.

Key Points:

• Focuses on emerging growth companies with the potential to become large-cap leaders.
• Actively managed by a team of experienced portfolio managers.
• Unique focus on non-Nasdaq 100 companies.
• Strong historical performance and growth trajectory.
• High liquidity and competitive expense ratio.

Risks:

• High volatility due to its focus on emerging companies.
• Subject to market risk associated with the technology and innovation sectors.

Who Should Consider Investing:

QQQX is suitable for investors with a long-term investment horizon seeking exposure to high-growth emerging companies and willing to accept higher volatility for potential outperformance.

Fundamental Rating Based on AI:

8.5/10

QQQX receives a high AI-based rating due to its strong financial performance, unique investment approach, experienced management team, and favorable growth trajectory. However, the higher expense ratio and inherent volatility associated with the underlying companies are considered as potential downsides.

Resources:

• VictoryShares website: https://www.victoryshares.com/product/nasdaq-next-50-etf/
• Yahoo Finance: https://finance.yahoo.com/quote/QQQX/
• ETF Database: https://etfdb.com/etf/qqqx/victory-shares-nasdaq-next-50-etf/

Disclaimer:

This information is for educational purposes only and should not be considered financial advice. Please consult a financial professional before making any investment decisions.