VictoryShares Nasdaq Next 50 ETF (QQQN)QQQN

ETF VictoryShares Nasdaq Next 50 ETF: A Deep Dive

Profile: The ETF VictoryShares Nasdaq Next 50 ETF (QQQX) is an actively managed ETF that seeks to track the performance of the Nasdaq Next 50 Index. This index comprises 50 mid-cap companies that are poised for future growth and are expected to become the next generation of large-cap leaders. QQQX focuses on emerging companies across various sectors and industries, offering investors a diversified exposure to the mid-cap segment of the Nasdaq.

Objective: The primary objective of QQQX is to provide capital appreciation through investment in the Nasdaq Next 50 Index. This ETF aims to capture the growth potential of emerging mid-cap companies with strong fundamentals and high growth prospects.

Issuer:

• Reputation and Reliability: The ETF is issued by VictoryShares, a subsidiary of Victory Capital Management, a reputable asset management firm founded in 1981 with over $170 billion in assets under management. Victory Capital has a strong track record of managing actively managed funds across various asset classes.
• Management: The ETF is actively managed by a team of experienced portfolio managers at Victory Capital, led by Michael Cooper, Chief Investment Officer, and Brian Chappatta, Portfolio Manager. The team has extensive experience in analyzing and selecting mid-cap companies with high growth potential.

Market Share: QQQX currently holds a small market share in the actively managed mid-cap ETF sector, with approximately $150 million in total net assets. However, the Nasdaq Next 50 Index itself has a market cap of $1.5 trillion, indicating the potential audience for this ETF.

Total Net Assets: As mentioned above, QQQX has total net assets of around $150 million.

Moat:

• Active Management: Unlike passively managed index-tracking ETFs, QQQX employs active management to select the most promising companies from the Nasdaq Next 50 Index, potentially leading to superior performance.
• Experienced Management Team: The ETF benefits from the expertise of Victory Capital's experienced portfolio managers, who have a proven track record in identifying and investing in high-growth mid-cap companies.
• Niche Market Focus: QQQX caters to investors specifically interested in the potential of emerging mid-cap companies with high growth prospects.

Financial Performance:

• Historical Performance: Since its inception in 2019, QQQX has delivered strong returns, outperforming the broader market. However, as it is a relatively new ETF, the time horizon for historical performance analysis is limited.
• Benchmark Comparison: QQQX has outperformed the Russell 2500 Index, a benchmark for mid-cap stocks, since its inception. This suggests the effectiveness of the ETF's active management strategy in selecting high-performing companies.

Growth Trajectory: The Nasdaq Next 50 Index, as represented by QQQX, has historically exhibited strong growth potential, with the potential for continued growth in the future.

Liquidity:

• Average Trading Volume: QQQX has a moderate average trading volume, indicating reasonable liquidity.
• Bid-Ask Spread: The bid-ask spread is relatively low, implying efficient trading of the ETF.

Market Dynamics:

• Economic Indicators: Economic growth, interest rates, and inflation can impact the performance of mid-cap companies, indirectly affecting QQQX.
• Sector Growth Prospects: The growth potential of various sectors represented in the Nasdaq Next 50 Index will influence the ETF's performance.
• Current Market Conditions: Market volatility and investor sentiment can affect the overall performance of the ETF.

Competitors: Key competitors in the actively managed mid-cap ETF space include:

• iShares S&P MidCap 400 Growth ETF (IJT)
• Invesco Dynamic Mid Cap ETF (PSCD)
• Vanguard Mid-Cap Growth ETF (VOT)

Expense Ratio: The expense ratio of QQQX is 0.59%, which is slightly higher than some other actively managed mid-cap ETFs.

Investment Approach and Strategy:

• Strategy: QQQX aims to track the performance of the Nasdaq Next 50 Index, actively selecting the most promising companies within the index.
• Composition: The ETF primarily invests in common stocks of mid-cap companies listed on the Nasdaq Stock Market.

Key Points:

• Actively managed mid-cap ETF with a focus on high-growth companies.
• Outperformed the benchmark Russell 2500 Index since inception.
• Moderate liquidity and reasonable expense ratio.

Risks:

• Volatility: Mid-cap companies can be more volatile than large-cap companies, leading to potential fluctuations in the ETF's value.
• Market Risk: The ETF's performance is directly tied to the performance of the Nasdaq Next 50 Index and its underlying companies, exposing it to market risks.

Who Should Consider Investing:

• Investors seeking growth potential in mid-cap companies.
• Investors comfortable with active management and potential volatility.

Fundamental Rating Based on AI: 7/10 The AI-based rating system considers financial health, market position, and future prospects. QQQX receives a 7/10 rating, indicating a solid fundamental profile with strong growth potential.

• Strengths: Active management, experienced management team, niche market focus, and strong historical performance.
• Weaknesses: Limited track record, higher expense ratio compared to some competitors.

Resources and Disclaimers:

• Data for this analysis was gathered from the following sources:
  • VictoryShares website
  • Nasdaq website
  • ETF.com
• This analysis is for informational purposes only and should not be considered investment advice. Investors should conduct their own research and due diligence before making investment decisions.