Invesco Files for Mega QQQ ETF to Target Top Nasdaq Stocks

Invesco has proposed a new ETF focused on the largest companies in the Nasdaq-100 Index, according to a Securities and Exchange Commission filing. 

The proposed Invesco Mega QQQ ETF (QBIG) seeks to offer investors concentrated exposure to approximately the top 45% of Nasdaq-100 constituents by weight.

According to the Aug. 30 prospectus, QBIG will track the Nasdaq-100 Mega Index, which began on July 29, with a base value of 1000.00. The index includes tech giants Apple, Microsoft, Amazon, and Nvidia.

QBIG’s investment strategy involves using a combination of total return swaps and direct equity investments to gain exposure to its target companies, the filing said. The fund will typically hold or have exposure to between six and 15 stocks, reflecting its concentrated approach to mega-cap investing.

Mega-Cap Stocks Lead Market Gains

The filing comes as mega-cap stocks, particularly in the technology sector, have led market gains in recent years. The Invesco S&P 500 Top 50 ETF (XLG), which tracks the 50 largest U.S. companies, has outperformed the broader SPDR S&P 500 ETF Trust (SPY) year-to-date, returning 22.6% compared to 18.2% for SPY, according to etf.com data.

Under normal market conditions, QBIG will invest at least 80% of its assets in securities of mega-capitalization companies, which the fund defines as those included in the Nasdaq-100 Mega Index. These companies often have market capitalizations exceeding $200 billion.

The proposed ETF joins a growing list of funds targeting the largest stocks in major indexes. The Roundhill Magnificent Seven ETF (MAGS), which focuses on several of the top Nasdaq-100 companies, has attracted over $603 million in assets under management and is up 31.3% year-to-date, according to etf.com data.

BlackRock also filed plans last month for three new ETFs targeting different segments of major equity indexes. These include the iShares Nasdaq Top 30 Stocks ETF and the iShares Top 20 U.S. Stocks ETF, both focusing on the largest companies in their respective indexes.

As of the filing date, the Nasdaq-100 Mega Index included 10 companies: Alphabet (both Class A and C shares), Amazon, Apple, Broadcom, Costco Wholesale, Meta Platforms, Microsoft, Nvidia, and Tesla.

Invesco currently offers 228 ETFs traded on U.S. markets, with total assets of $571.7 billion, according to etf.com data. The largest of these is the Invesco QQQ Trust (QQQ), which holds $286.7 billion in assets.