Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Invesco NASDAQ Next Gen 100 ETF (QQQJ) is a passively managed exchange traded fund launched on 10/13/2020.
The fund is sponsored by Invesco. It has amassed assets over $615.75 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.68%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 31.70% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Alnylam Pharmaceuticals Inc (ALNY) accounts for about 2.19% of total assets, followed by Ebay Inc (EBAY) and Monolithic Power Systems Inc (MPWR).
The top 10 holdings account for about 17.34% of total assets under management.
Performance and Risk
QQQJ seeks to match the performance of the NASDAQ NEXT GENERATION 100 INDEX before fees and expenses. The NASDAQ Next Generation 100 Index comprises of securities of the next generation of Nasdaq-listed non-financial companies; that is, the largest 100 Nasdaq-listed companies outside of the NASDAQ-100 Index.
The ETF has added about 1.44% so far this year and it's up approximately 14.86% in the last one year (as of 06/05/2025). In the past 52-week period, it has traded between $25.48 and $32.91.
The ETF has a beta of 1.13 and standard deviation of 21.44% for the trailing three-year period. With about 109 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco NASDAQ Next Gen 100 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, QQQJ is a sufficient option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $167.17 billion in assets, Invesco QQQ has $338.40 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Invesco NASDAQ Next Gen 100 ETF (QQQJ): ETF Research Reports Alnylam Pharmaceuticals, Inc. (ALNY): Free Stock Analysis Report eBay Inc. (EBAY): Free Stock Analysis Report Monolithic Power Systems, Inc. (MPWR): Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports Vanguard Growth ETF (VUG): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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