Brand Value Underappreciated Catalyst for These ETFs

Market participants frequently allocate capital to shares of companies with strong brand recognition, but many do so without recognizing the importance of those brands to investment outcomes.

Over the long term, venerable brands can deliver impressive results for investors. Those looking to access broad baskets of beloved brands may want to consider exchange traded funds such as the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM).

Consider the findings in Brand Finance’s recent survey of the world’s 500 most valuable brands. Led by Apple (NASDAQ: AAPL), which is the second-largest holding in the Invesco ETFs, four of the top five most valuable brands are marquee holdings in QQQ and QQQM.

“Apple has achieved a remarkable brand value increase, even as iPhone volume share has largely plateaued, as its strategy of finding new markets, expanding its ecosystem, and encouraging upgrades to higher-value iPhones has been highly effective. Apple has maintained its position as the dominant player in the premium smartphone market, with 71% value share,” according to the research firm.

QQQ, QQQM Brand Recognition Beyond Apple

As many consumers and investors know, Apple is one of the world’s most vaunted brands and that’s meaningful to QQQ and QQQM because the stock accounts for 8.80% of the ETFs’ rosters, but there’s more to the brand story in these funds.

Take the case of semiconductor giant Nvidia (NASDAQ: NVDA). While Nvidia is a business-to-business enterprise, artificial intelligence (AI) is contributing to elevated brand awareness and value for the company. That’s potentially good news for QQQ and QQQM investors because the stock commands of 4.29% of the ETFs’ portfolios.

“A key supplier of chips in the AI space, NVIDIA is perceived as highly innovative while familiarity, consideration, and recommendation levels all increased year-on-year, according to Brand Finance research. The brand’s overall performance firmly positions NVIDIA as a front-runner in the AI chip market, demonstrating a successful balance between innovation and market adaptation,” adds Brand Finance.

Microsoft (NASDAQ: MSFT), Alphabet’s (NASDAQ: GOOG) Google, and Amazon (NASDAQ: AMZN) joined Apple in the top five most valuable brands. That trio combines for approximately 19% of the QQQ and QQQM rosters. Meta Platforms’ (NASDAQ: META) Facebook is also a top 10 most valuable brand, according to Brand Finance. Meta is the largest communication services holding in the two Invesco ETFs.

Several other QQQ/QQQM components are found among the 100 most valuable global brands, which is impressive when considering the ETFs exclude financial services stocks – a sector that’s heavily represented in the Brand Finance rankings.

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