The Invesco QQQ Trust (QQQ) is, by a long shot, the most popular ETF that tracks the NASDAQ-100 Index; however, Invesco’s Innovation Suite also comprises four other compelling exchange-traded offerings.
Invesco’s line-up of ETFs in its QQQ family includes the Invesco NASDAQ 100 ETF (QQQM), the Invesco ESG NASDAQ 100 ETF (QQMG), the Invesco NASDAQ Next Gen 100 ETF (QQQJ), and the Invesco ESG NASDAQ Next Gen 100 ETF (QQJG), in addition to QQQ.
The five ETFs are similar to one another, but each has its own nuances that are important to consider when deciding where to allocate assets.
Indexes and ESG Integration
The foundation of all of the ETFs is the Nasdaq 100 and the Nasdaq Next Gen 100 indexes, which both provide access to innovative, non-financial companies. The former is made of the largest non-financial companies, while the latter measures the performance of the largest 10 securities outside of the Nasdaq 100.
QQMG and QQJG have added ESG overlays. Companies are removed from each of the indexes if their business activities are incompatible with ESG principles, such as controversial weapons or tobacco products, according to regulatory filings.
The securities must also be ranked 4 or lower on a 5-point controversy scale, and they must also rank lower than 40 on a 100-point ESG risk rating score, according to regulatory filings.
In addition, the company weights are tilted toward companies with more attractive ESG scores.
With $208 billion in assets, QQQ is highly liquid and one of the best-performing large-cap growth funds.
Age of Funds
QQQ is the oldest of the family, having launched in 1999. 21 years later, in 2020, QQQJ and QQQM came to market. Finally, in October of 2021, Invesco unveiled two ESG funds, QQMG and QQJG.
The quintet of ETFs is priced more or less uniformly. QQJ and QQQM both carry expense ratios of 15 basis points, and QQQ, QQJG, and QQMG each carry expense ratios of 20 basis points.
While QQQM offers investors the opportunity to achieve the same exposure with a lower cost, the total cost of ownership balances the scale, allowing investors to decide for themselves which is a better fit for their portfolios. QQQ, due to its popularity and hundreds of billions in assets, is more liquid and has lower trading costs.
For more information, visit Invesco.com.
For more news, information, and strategy, visit the ETF Education Channel.