Investors looking for easy exposure to a slew of Nasdaq stocks but are concerned about a size bias in their tech holdings should look no further than the Invesco NASDAQ Next Gen 100 ETF (QQQJ).
While Invesco’s flagship product, the Invesco QQQ Trust (QQQ), provides access to the 100 largest non-financial companies listed on the Nasdaq. QQQJ offers that approach with a twist: exposure to the next 100 largest companies listed on the Nasdaq, excluding financials.
With a mid-cap focus, the companies in QQQJ are defined by their high expenditures on research and development as a proportion of revenue, which could prime them for high future growth. Research and development spending is considered a key measure of a company’s commitment to innovation. Research and development can lead to discoveries, competitive advantages, and cost-saving measures, according to Invesco.
Thanks to their high growth profiles and innovative business models, some companies may eventually “graduate” from a holding in QQQJ to a holding in QQQ.
The securities included in QQQJ aren’t just limited to tech stocks. QQQJ tracks an index of the largest non-financial stocks listed on the Nasdaq that aren’t included in the Nasdaq-100 index. Consumer services, transportation, consumer durables, and retail trade are sectors included in the fund and weighted at over 4.5%, according to ETF Database.
The fund’s top 10 holdings include ON Semiconductor Corporation (ON), Diamondback Energy (FANG), CoStar Group (CSGP), Coca-Cola Europacific Partners (CCEP), CDW Corp (CDW), Tractor Supply Company (TSCO), Ulta Beauty (ULTA), Horizon Therapeutics Public Limited Company (HZNP), Enphase Energy (ENPH), and Expedia Group (EXPE), according to ETF Database.
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