Should Invesco NASDAQ Next Gen 100 ETF (QQQJ) Be on Your Investing Radar?

The Invesco NASDAQ Next Gen 100 ETF (QQQJ) was launched on October 13, 2020, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.

The fund is sponsored by Invesco. It has amassed assets over $1.19 billion, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.

Why Large Cap Growth

Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.53%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector -- about 31.4% of the portfolio. Healthcare and Industrials round out the top three.

Looking at individual holdings, Ebay Inc (EBAY) accounts for about 2.49% of total assets, followed by Flex Ltd (FLEX) and Natera Inc (NTRA).

The top 10 holdings account for about 17.86% of total assets under management.

Performance and Risk

QQQJ seeks to match the performance of the NASDAQ NEXT GENERATION 100 INDEX before fees and expenses. The NASDAQ Next Generation 100 Index comprises of securities of the next generation of Nasdaq-listed non-financial companies; that is, the largest 100 Nasdaq-listed companies outside of the NASDAQ-100 Index.

The ETF has gained about 26.39% so far this year and is up roughly 37.21% in the last one year (as of 08/18/2026). In the past 52-week period, it has traded between $34.04 and $46.78.

The ETF has a beta of 1.12 and standard deviation of 18.61% for the trailing three-year period. With about 109 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco NASDAQ Next Gen 100 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, QQQJ is a reasonable option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.

The Vanguard Morningstar Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Morningstar Growth ETF has $229.04 billion in assets, Invesco QQQ has $496.97 billion. VUG has an expense ratio of 0.03% and QQQ charges 0.18%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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This article originally published on Zacks Investment Research (zacks.com).

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