ProShares Debuts Momentum Take On ‘QQQ’

May 20, 2021

Today, ProShares launched an ETF that offers yet another take on the Nasdaq-100 Index. The ProShares Nasdaq-100 Dorsey Wright Momentum ETF (QQQA) tracks a benchmark that applies the Dorsey Wright relative strength methodology to the 100-stock index to create a momentum-focused portfolio.

QQQA comes with an expense ratio of 0.58% and lists on the Nasdaq stock market.

“We thought it was a perfect combination to put together with our partners at Nasdaq: an index that uses the Dorsey Wright approach and fishes in the pond of the Nasdaq-100. You can’t get better than that combination, as far as we’re concerned,” said ProShares Global Investment Strategist Simeon Hyman.  

The fund’s underlying index ranks the components of the Nasdaq-100 based on relative strength and selects the top 21 securities for inclusion, equal weighting them. The index is reconstituted on a quarterly basis, according to the prospectus.

Hyman notes that the equal weighting helps to avoid the dramatic tilts to individual companies that can occur in indexes weighted by market capitalization.

“Its place in your portfolio would be in a growth sleeve or in a factor satellite,” he added.

The index’s top holdings as of the end of April were IDEXX Laboratories, Tesla and Alphabet, based on a fact sheet.

The Invesco QQQ Trust (QQQ) blew the doors off most other equity ETFs in 2020, and ETFs offering other angles on the fund have gotten a lot of attention. For example, the Invesco NASDAQ Next Gen 100 ETF (QQQJ) targets the next 100 stocks eligible for inclusion in the Nasdaq-100 Index, while the VictoryShares Nasdaq Next 50 ETF (QQQN) does the same with just the next 50 stocks, offering a more concentrated portfolio than QQQJ. However, QQQA is the first ETF to take the holdings of QQQ and pare them based on momentum to a group of just 21 securities.

Contact Heather Bell at [email protected]

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