Invesco Adds ‘Future Gen’ to QQQ Suite

Technology-focused ETF tracking innovator index began trading Thursday.

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Reviewed by: Heather Bell
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Edited by: Heather Bell

Invesco, the fourth-largest provider of exchange-traded funds, added a tech-focused, index-tracking ETF to its QQQ Innovation suite. 

The Invesco Nasdaq Future Gen 200 ETF (QQQS), which covers 200 stocks on the Nasdaq Innovators Completion Cap Index, rose $1.49, or 6.2% to $25.73 in midday trading. Fewer than 2,000 shares traded by then. 

The fund “will focus on smaller-cap companies with a competitive advantage on certain inventions,” John Hoffman, head of Americas, ETFs and indexed strategies at Invesco, said in a statement. The companies have traditionally spent significantly more on research and development than their peers, he said. 

The 200 tracked stocks’ market capitalization are less than the Nasdaq-100 Index and the Nasdaq Next Generation 100 Index. The Innovators index tracks companies with “the most valuable portfolios of patents relative to their total market values.” QQQS comes with an expense ratio of 0.20% and lists on the Nasdaq stock market.  

Atlanta-based Invesco, which manages $307.1 billion, also runs the $146.5 billion Invesco QQQ Trust (QQQ), one of the world’s biggest and most actively traded ETFs. It covers the largest nonfinancial companies listed on the Nasdaq by tracking the Nasdaq-100 Index.  

Two years ago, Invesco introduced a lower-cost version of that flagship fund and a “next generation” version. The $4.6 billion Invesco NASDAQ 100 ETF (QQQM) also tracks the Nasdaq-100 index and is structured as an open-ended fund, unlike the QQQ, which is structured as a unit investment trust. It has an expense ratio of 0.15%, 5 basis points lower than the cost of QQQ.  

Invesco also launched the Invesco NASDAQ Next Gen 100 ETF (QQQJ) in October 2020; it is now a $704.4 million fund. It covers the 100 nonfinancial stocks that are just below the Nasdaq-100 in terms of market capitalization. 

While the other funds in the suite choose their holdings based on market capitalization, QQQS’s underlying index bases its holdings on the estimated value of their patent portfolios after excluding the holdings of QQQM and QQQJ. Index components must meet minimum size and liquidity requirements and are equally weighted within the index, the prospectus says. 

The new fund’s top holdings include Prothena Corp., 1.10%; UroGen Pharma, 0.89%; and Revance Therapeutics Inc., 0.82%. The most heavily weighted sectors are health care at 56.34%, information technology at 30.77% and consumer discretionary at 5.87%.  

 

Contact Heather Bell at [email protected] 

Heather Bell is a managing editor with etf.com. Prior to joining the company, she held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and a one-time Jeopardy! champion. She resides in the Denver area with her two dogs, and enjoys hiking in the mountains and frequenting the city’s excellent bookstores.