Accessing innovation via exchange traded funds is increasingly easy for investors to accomplish. Adding an environmental, social, and governance (ESG) overlay to the mix is possible, too.
The Invesco ESG NASDAQ Next Gen 100 ETF (QQJG) accomplishes that objective. QQJG debuted just two months ago, and while that clearly makes the fund young, it arrives at a time when there is overwhelming enthusiasm for ESG ETFs.
“Global ESG assets are on track to exceed $53 trillion by 2025, according to Bloomberg Intelligence, representing more than a third of the $140.5 trillion in projected total assets under management,” notes deVere Group.
While QQJG is a rookie ETF, it has pedigree. It’s the ESG answer to the popular Invesco NASDAQ Next Gen 100 ETF (QQQJ), meaning that it has some ties to the venerable and widely followed Nasdaq-100 Index (NDX). QQJG follows the Nasdaq Next Generation 100 ESG Index, making it the ESG training ground for companies in position to eventually gain NDX promotion.
That’s a compelling combination and one that investors may find efficient as they look to access growth equities and ESG virtue under one umbrella. QQJG also appears well-timed.
“Previously, ESG investments were often considered a ‘quirk’ or ‘nice to have,’” said deVere Group CEO Nigel Green. “But now we believe that they should be a part of everyone’s investment portfolio for several key reasons.”
Like the traditional Nasdaq-100, QQJG features no exposure to financial services. The new ETF also excludes the energy and utilities sectors. And like its Nasdaq-100 counterparts, QQJG is heavily allocated to the technology sector with a weight of 41.58% to that group. With so many investors embracing growth ETFs for tech exposure, QQJG is that much more approachable to tech investors searching for growth and ESG principles.
“ESG represents a revolution of investment strategy itself. A seismic shift has occurred in corporate behavior. How firms approach ESG factors and the value they place on them compared to other considerations has already changed forever. The ESG themes are already embedded in the global economy as this is only set to grow in the years to come – and, of course, investors should embrace the concept of having early advantage,” adds Green.
QQJG checks another interesting box. Currently, there aren’t many ETFs combing mid-cap and growth stocks and ESG, but QQJG does that, as over 81% of its 92-stock lineup is allocated to mid-cap equities.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.