ETF of the Week: VictoryShares Nasdaq Next 50 ETF (QQQN)

ETF Trends CEO Tom Lydon discussed the VictoryShares Nasdaq Next 50 ETF (QQQN) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.

The investment seeks to provide investment results that track the performance of the Nasdaq Q-50 Index before fees and expenses. The fund aims to achieve its investment objective by investing at least 80% of its assets in securities in the index. The index comprises the 50 largest non-financial domestic and international companies listed on The Nasdaq Stock Market based on market capitalization after excluding the companies included in the Nasdaq-100 Index.

QQQN is ETF to ride the next wave of Nasdaq innovators. The fund covers the 50 largest non-financial stocks trading on the Nasdaq exchange after excluding the components of the Nasdaq-100. The stocks that are next up to bat after the Nasdaq-100.

Why Nasdaq covers the next 50? It provides a cost-effective opportunity to invest in the next generation of innovators. There’s also the offer of pushing diversification into forward-thinking, disruptive companies beyond the established, mega-cap, and large-cap leaders in the Nasdaq-100 Index.

It also deploys the proven methodology behind the time-tested Nasdaq-100 Index, emphasizing innovation, and growth. Additionally, QQQN hopes to provide access to an index of disruptive and innovative companies, helping to capture their potential early, well before they may grow to be tomorrow’s mega-cap leaders.

Related: ETF of the Week: VanEck Vectors Brazil Small-Cap ETF (BRF) 

This isn’t some new, flavor-of-the-month gimmick. The Nasdaq Q-50 Index has been live and proven for more than ten years. Its methodology aligns with the innovation and growth focus behind the time-tested Nasdaq-100 Index but emphasizing forward-thinking companies on the vanguard of market leadership and technological advancement.

For the period from April 30, 2009, to April 30, 2020, the Nasdaq Q-50 outperformed the S&P 500 by 232.64% on a price return basis and its mid-cap cousin, the MID, by 272.93%. While the Nasdaq Q-50’s price performance trailed the Nasdaq-100 over this period by 79.19%, the key benefit of the Nasdaq Q-50 is diversification into additional disruptive companies beyond the established, mega-cap and large-cap leaders in the Nasdaq-100.

Through the first four months of 2020, the Nasdaq Q-50 outperformed both the S&P Midcap 400 and the S&P 500 indexes, a similar trend of outperformance going back to the Index’s start date in 2007. Through April 30, 2020, the Nasdaq Q-50 was down -4.81%, compared to -20.20% for the S&P Midcap 400, a relative outperformance of 25.01%, and -9.85% for the S&P 500, a relative outperformance of -5.04%.

Listen to the full podcast episode on the QQQN ETF:

For more podcast episodes featuring Tom Lydon, visit our podcasts category.