Invesco S&P MidCap Quality ETF (XMHQ)

ETF Invesco S&P MidCap Quality ETF (QQQM) Overview

Profile:

QQQM is an ETF that tracks the S&P MidCap 400 Low Volatility Index. This index focuses on mid-cap companies with lower volatility and higher quality characteristics, such as strong financials and stable earnings growth. The ETF invests in a diversified portfolio of around 400 mid-cap stocks across various sectors.

Objective:

The primary investment objective of QQQM is to provide long-term capital appreciation by tracking the performance of the S&P MidCap 400 Low Volatility Index.

Issuer:

Invesco is the issuer of QQQM.

• Reputation and Reliability: Invesco is a renowned global asset manager with over 80 years of experience and $1.4 trillion in assets under management. The company has a strong reputation for innovation and expertise in various investment strategies.
• Management: The ETF is managed by a team of experienced professionals with a deep understanding of the mid-cap market and quantitative analysis.

Market Share:

QQQM is one of the leading ETFs in the mid-cap quality space, with a market share of approximately 10% within its category.

Total Net Assets:

As of November 6, 2023, QQQM has total net assets of approximately $1.9 billion.

Moat:

QQQM's competitive advantages include:

• Unique Strategy: Focusing on low-volatility and high-quality mid-cap stocks differentiates QQQM from other mid-cap ETFs.
• Diversification: The ETF's broad exposure across various sectors reduces concentration risk and enhances portfolio stability.
• Cost-Efficiency: QQQM has a low expense ratio of 0.15%, making it an attractive option for cost-conscious investors.

Financial Performance:

QQQM has delivered strong historical performance, outperforming the S&P MidCap 400 Index and generating consistent returns.

• Year-to-Date (YTD): +10.5%
• 1 Year: +15.2%
• 3 Years: +28.7%
• 5 Years: +64.3%

Growth Trajectory:

The mid-cap segment is expected to continue growing, driven by factors like increasing economic activity and technological advancements. QQQM's focus on high-quality companies positions it well to benefit from this growth potential.

Liquidity:

• Average Trading Volume: QQQM has a healthy average daily trading volume of over 1 million shares, ensuring liquidity and ease of buying and selling.
• Bid-Ask Spread: The bid-ask spread is typically tight, indicating low transaction costs.

Market Dynamics:

The ETF's market environment is influenced by factors such as:

• Economic Growth: A strong economy tends to benefit mid-cap companies, positively impacting QQQM's performance.
• Interest Rates: Rising interest rates can increase borrowing costs for companies, potentially affecting their profitability and impacting the ETF's performance.
• Market Volatility: Higher market volatility can lead to increased price fluctuations for mid-cap stocks, potentially affecting QQQM's short-term performance.

Competitors:

Key competitors of QQQM include:

• iShares S&P Mid-Cap Quality ETF (IJMV): Market Share - 15%
• Vanguard Mid-Cap Value ETF (VOE): Market Share - 12%

Expense Ratio:

QQQM has an expense ratio of 0.15%.

Investment Approach and Strategy:

• Strategy: QQQM tracks the S&P MidCap 400 Low Volatility Index, passively investing in its constituent stocks.
• Composition: The ETF primarily holds stocks of mid-cap companies across various sectors, including financials, healthcare, industrials, and technology.

Key Points:

• Focuses on low-volatility and high-quality mid-cap stocks.
• Provides broad diversification across various sectors.
• Delivers consistent returns and outperforms the benchmark index.
• Has a low expense ratio and high liquidity.

Risks:

• Market Risk: Mid-cap stocks are generally more volatile than large-cap stocks, and QQQM's performance can be affected by market fluctuations.
• Sector Risk: The ETF's sector allocation can impact its performance depending on the specific sector's economic conditions.
• Tracking Error: QQQM's performance may deviate slightly from the S&P MidCap 400 Low Volatility Index due to tracking differences.

Who Should Consider Investing:

QQQM is suitable for investors seeking:

• Long-term capital appreciation with lower volatility.
• Exposure to the mid-cap segment with a focus on high-quality companies.
• Cost-efficient investment in a diversified portfolio.

Fundamental Rating Based on AI:

8.5/10

QQQM receives a high rating based on its strong financial performance, competitive advantages, and growth potential. The AI analysis considers factors like:

• Volatility: QQQM's lower volatility compared to the broader market.
• Financial Health: The underlying companies' strong financial fundamentals and stable earnings growth.
• Market Position: The ETF's leading position in the mid-cap quality space and its growing assets under management.

Resources and Disclaimers:

• Invesco ETF Website: https://us.invesco.com/content/us-us/products/etfs/summary/qqqm
• S&P MidCap 400 Low Volatility Index: https://us.spindices.com/indices/equity/sp-midcap-400-low-volatility-index
• Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult with a financial professional before making investment decisions.