New ETF Shows Large Cap Tech Can’t Have All the Fun

When it comes to getting large cap tech exposure via an ETF, there’s no doubt that one of the funds that quickly come to mind is the Invesco QQQ ETF (NASDAQ: QQQ). Large cap tech has been having its day in the sun despite the Covid-19 pandemic, but they can’t have all the fun–enter the Nasdaq Next Gen 100 ETF (QQQJ).

QQQJ also 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 midcap companies that investors may not know about due to a lack of media exposure.

Per a CNBC article, QQQJ “might more appropriately be called the Nasdaq 100 Junior Varsity list. The Invesco QQQ Trust (QQQ) started tracking the Nasdaq 100 Index in 1999. Since then, it’s become the fifth-largest ETF listed in the U.S., with $135 billion in assets under management.”

“Now, Invesco is looking to capitalize on the interest in technology and growth stocks by offering a new “junior” QQQ,” the article added. “Any why not? QQQ is up nearly 40% this year. Shares outstanding are up nearly 20% since March, a sign of the exploding interest in the growth stocks the fund is famous for.”

As for more information on the fund, the Invesco website notes that QQJ “is based on the NASDAQ Next Generation 100 Index (Index). The Fund will invest at least 90% of its total assets in the securities that comprise the Index.”

According to Invesco, the index “is comprised of securities of the next generation of Nasdaq-listed non-financial companies; that is, the largest 100 Nasdaq-listed companies outside of the NASDAQ-100 Index®. The Fund and Index are rebalanced quarterly and reconstituted annually.”

“QQQJ will give investors access to 100 mid-cap companies using technology to disrupt their sector,” said John Hoffman, Invesco’s head of Americas ETFs. “While this does include companies in the technology sector, the commonality across these companies is their legacy of using innovation and technology to create competitive advantages across multiple sectors and industries.”

Of course, investors can always stick with the tried and true QQQ. Not only is it a favorite for traders due to its high trading volume and liquidity, long-term buy and hold investors also opt for the ETF due to its exposure to the white hot large cap tech sector.

QQQ seeks investment results that generally correspond to the price and yield performance of the NASDAQ-100 Index®. To maintain the correspondence between the composition and weights of the securities in the trust (the “securities”) and the stocks in the NASDAQ-100 Index®, the adviser adjusts the securities from time to time to conform to periodic changes in the identity and/or relative weights of index securities. The composition and weighting of the securities portion of a portfolio deposit are also adjusted to conform to changes in the index.

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