Invesco has expanded its ‘QQQ Innovation’ suite in the US with the launch of two new ETFs offering mega-cap and low-volatility exposure to stocks from the Nasdaq 100.
Invesco’s QQQ Innovation suite offers a range of exposures for Nasdaq-listed stocks.
The Invesco Top QQQ ETF (QBIG US) and the Invesco QQQ Low Volatility ETF (QQLV US) are now trading on Nasdaq with expense ratios of 0.29% and 0.25%, respectively.
The Nasdaq 100, comprising 100 of the largest non-financial companies listed on Nasdaq, is widely regarded as a benchmark for the US large-cap technology, media, and telecom (TMT) sectors.
Invesco’s flagship ETF, the $330 billion Invesco QQQ (QQQ US), launched in 1999, provides core, plain-vanilla exposure to the Nasdaq 100 and is a staple for investors seeking highly liquid access to this key growth segment.
The QQQ Innovation suite, introduced in October 2020, reflects Invesco’s strategy to diversify its Nasdaq-focused offerings. The suite includes specialized ETFs such as an options-income-enhanced Nasdaq 100 ETF, an ESG-screened Nasdaq 100 ETF, and funds targeting mid- and small-cap Nasdaq-listed stocks. The latest additions build on this framework by providing differentiated access to the Nasdaq 100.
The Invesco Top QQQ ETF focuses on mega-cap stocks, offering the potential for high-beta exposure and enhanced upside participation. Conversely, the Invesco QQQ Low Volatility ETF emphasizes low-beta stocks, catering to investors seeking potential downside risk mitigation.
According to Invesco, these complementary strategies allow investors to tailor their Nasdaq 100 exposure based on their risk and return preferences.
Brian Hartigan, Global Head of ETFs & Index Investments at Invesco, commented: “We’re excited that the longstanding partnership between Nasdaq and Invesco continues to result in the launch of unique, innovative ETFs, positioning Invesco as the leading provider of Nasdaq 100 ETFs. QBIG and QQLV will offer investors additional ways to access the Nasdaq Indexes that meet their desired investment outcomes. These ETFs further advance the Invesco QQQ Innovation suite as a ‘one-stop shop’ for innovation that offers investors a range of differentiated ETFs.”
Mega-Cap Exposure
The Invesco Top QQQ ETF is actively managed but is designed to align broadly with the Nasdaq 100 Mega Index. This index captures the performance of companies that collectively represent the top 45% of the Nasdaq 100’s market capitalization weight.
Invesco advocates this methodology as an optimal way to achieve focused exposure to innovation through high-growth mega-cap firms. By targeting the top 45% of market capitalization rather than specific names or a fixed number of companies—such as the “Magnificent 7” or “FAANG” stocks—the ETF is positioned to adapt dynamically to shifts in the mega-cap landscape.
The fund employs market capitalization weighting, with an individual stock cap of 35%, ensuring diversification while maintaining targeted exposure. It is reconstituted and rebalanced quarterly.
Low-Volatility Focus
The Invesco QQQ Low Volatility ETF is linked to the Nasdaq 100 Low Volatility Index. This index ranks Nasdaq 100 constituents based on their trailing 12-month share price volatility and selects those in the bottom quartile.
Constituents are weighted by the inverse of their trailing 12-month volatility, creating a bias toward stocks with lower price fluctuations. Weighting is subject to constraints, including a single-stock cap of 10% and a cumulative cap of 50% for stocks with individual weights exceeding 4.75%.