The ETF industry bore witness to exponential growth the past year, and more is certainly ahead. One pair of innovative funds has garnered over $1 billion in assets since inception: the Invesco NASDAQ Next Gen 100 ETF (QQQJ) and the Invesco NASDAQ 100 ETF (QQQM).
“Innovative companies were the ones that succeeded in 2020,” said Anna Paglia, the company’s head of ETFs and indexed securities, in a recent CNBC article that noted how “QQQJ and QQQM, the newest members of Invesco’s Nasdaq Innovation Suite, together have attracted over $1 billion in assets since their October launches.”
QQQJ gives ETF investors tech exposure, but with a mid cap twist. While large cap companies in tech like Apple or Microsoft are solid plays, there are also opportunities to be had in mid cap companies that investors may not know about due to a lack of media exposure.
QQQM is based on the NASDAQ-100 Index. The Index includes securities of 100 of the largest domestic and international nonfinancial companies listed on Nasdaq.
“Whoever is able to innovate, whoever is able to invest in technology, development and research, is really going to succeed in 2021 and beyond,” Paglia said. “QQQJ [and]QQQM really embrace that. Everything that brings innovative ideas to the market is likely going to find a place in those funds and in investors’ portfolios.”
Since it first started trading, QQQJ has risen 21%, and has seen consistently heavy volume. Its stochastic relative strength index (StochRSI) indicator, renders the 0.578 level below overbought level, so price-oriented traders and investors may want to start considering an entry point.
Just like QQQJ, QQQM saw its price recover since its inception date, gaining about 7%. There was a heavy volume spike on January 6 during the first trading week of the new year, and its StochRSI is flashing a buy signal for traders looking for an ideal entry point.
Will Thematic Funds Win Out in 2021?
As the global economy continues its healing process, look for ETFs to continue gaining steam. Thematic-based funds that offer investors niche exposure, and are key ways for providers to differentiate themselves.
Paglia mentioned that thematic funds will be “be the big winners of 2021 and beyond.”
“If you want to know what investors are going to buy, you just have to look at how they behave,” she said. “They are very conscious about their social responsibility, environmental responsibility. They don’t just want to look at returns. They want to look under the hood, so to speak. They want to know exactly what they are financing by buying an ETF.”
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