Investors are always trying to the next hot stock. That’s particularly true when it comes to identifying the next iterations of the famed FAANG quintet – Facebook (FB)Amazon (AMZN)Apple (AAPL)Netflix (NFLX), and Google parent Alphabet (GOOG).

The VictoryShares Nasdaq Next 50 ETF (QQQN) is an exchange traded fund that can make that objective easier.

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 “offers an opportunity to invest in the next generation of disruptive companies—those with proven business models but, presumably, at an earlier stage with still long runways of potential growth. In other words, imagine owning some of the companies destined for Nasdaq-100 Index in their formative years,” according to VictoryShares.

QQQN 1 Year Performance

Tomorrow’s Innovators Today

QQQN debuted last September, rapidly becoming one of 2020’s most successful new ETFs.

“In fact, many newly minted ETFs offer deep liquidity, much of it unseen on a typical trading screen,” according to VictoryShares research. “Average daily volume (i.e. the number of shares traded on an exchange) is not the ultimate representation of an ETF’s liquidity. Rather, it’s an incomplete figure, and sizable ETF trading activity may actually be taking place off exchanges altogether.”

QQQN rebalances quarterly. As a result, he noted the fund reacts quicker to the dynamic nature of these stocks.

Why does Nasdaq cover 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.

Lastly, the fund deploys the proven methodology behind the time-tested Nasdaq-100 Index, emphasizing innovation, and growth.

For more on innovative portfolio ideas, visit our Nasdaq Portfolio Solutions Channel.

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.