Invesco is an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life.Be the first to know! Sign up for Invesco US Blog and get expert investment views as they post.Disclosure for all Invesco US articles: Before investing, carefully read the prospectus and/or summary prospectus and carefully consider the investment objectives, risks, charges and expenses. The information provided is for educational purposes only and does not constitute a ...

Core Viewpoint - Invesco's QQQ has been voted to convert into an open-ended structure, potentially unlocking hundreds of millions in annual revenue for the asset manager [1] Group 1: Company Impact - The conversion to an open-ended structure is expected to significantly enhance revenue generation capabilities for Invesco [1] - This change could position Invesco more competitively within the ETF market, particularly as it is the world's fifth-largest ETF [1] Group 2: Industry Implications - The decision reflects a broader trend in the ETF industry towards more flexible investment structures, which may attract a wider range of investors [1] - The move could influence other asset managers to consider similar structural changes to enhance their product offerings and revenue streams [1]

Core Insights - Invesco Ltd.'s QQQ Trust, Series 1, has transitioned to an open-end exchange-traded fund (ETF) structure, approved by its shareholders, along with a new governance model featuring a board of trustees [1][7]. Group 1: Rationale and Benefits of the Move - The QQQ Trust has been operating under a unit investment trust (UIT) structure since its inception in 1999, which has become less efficient compared to modern ETFs, limiting capabilities such as reinvesting dividends and securities lending [2]. - The reclassification aims to align QQQ with contemporary ETF models, enhancing operational efficiencies and reducing the expense ratio, which is expected to drive revenue growth [2][3]. - The total expense ratio for Invesco QQQ will decrease from 0.20% to 0.18%, providing direct benefits to shareholders [3]. Group 2: Strategic Implications - The new structure will enable the fund to reinvest income and engage in securities lending without tax consequences for investors, while still tracking the Nasdaq-100 Index [3][7]. - Invesco's CEO highlighted the transformation as a means to enhance flexibility and improve outcomes for investors, while also aiming to grow assets under management, which would subsequently increase revenues [4]. Group 3: Market Performance - Invesco's shares have experienced a significant increase of 80.8% over the past six months, contrasting with a 2.1% decline in the industry [5]. - The company currently holds a Zacks Rank of 1 (Strong Buy), indicating strong market confidence [8].

Core Viewpoint - Emerging market bonds and stocks recorded double-digit percentage increases in 2025, with a general positive outlook for 2026 among investors [3][4]. Group 1: Performance of Emerging Markets - Emerging market local currency bonds rose by 18% and stocks increased by 26% in 2025, marking the first time since 2017 that emerging market stocks outperformed U.S. stocks [5]. - The yield spread between emerging market bonds and U.S. Treasury yields narrowed to its lowest level in 11 years [5]. - The Bloomberg Emerging Market Carry Index achieved a return of 16.71% in 2025, the best since 2009 [5]. Group 2: Investor Sentiment - A recent survey by Bank of America involving 300 investors showed a lack of pessimism towards emerging markets, with a significant shift in sentiment [6]. - HSBC's December survey indicated that bearish views on emerging market prospects have completely disappeared, reaching a historical high in net bullish sentiment [6]. - U.S. ETFs focused on emerging market stocks attracted nearly $31 billion in 2025, while emerging market bond funds absorbed over $60 billion [6]. Group 3: Future Outlook for 2026 - Analysts maintain a positive outlook for emerging market assets in 2026, with expectations for high yields and diversification benefits from emerging market bonds [8]. - Focus areas for investment include Central and Eastern Europe, parts of Latin America (like Colombia and Brazil), and Asia (including India, the Philippines, and South Korea) [8]. - The Chinese stock market is expected to see investments in technology sectors and industries with clear advantages, such as the electric vehicle supply chain and renewable energy [8]. Group 4: Economic Context - The global economic growth for developed markets is projected to be around 1% to 1.5%, while emerging markets are expected to show relatively strong growth [10]. - The dollar is anticipated to remain under pressure due to policy divergence and trade tensions, although a short-term rebound is possible [10]. - The investment focus is expected to shift towards global diversification, with emerging markets showing improved fundamentals [10]. Group 5: Currency and Arbitrage Strategies - The trajectory of the U.S. economy is crucial for the sustained strong performance of emerging market currencies [11]. - Investors are advised to consider the potential for continued low volatility in emerging market currencies, which could impact overall returns [13]. - Major financial institutions like JPMorgan and Morgan Stanley predict significant inflows into emerging market bonds due to a weak dollar and the AI investment boom [11].

Core Viewpoint - Emerging market assets are expected to perform well in 2026, with a general consensus among institutions that there is little pessimism regarding these markets [1][4][6]. Group 1: Market Performance - Emerging market local currency bonds have risen by 18% and stocks by 26% in 2025, marking a significant recovery from previous years [3]. - Emerging market stocks have outperformed U.S. stocks for the first time since 2017, and the yield spread between emerging market bonds and U.S. Treasuries has narrowed to its lowest level in 11 years [3]. - The Bloomberg Emerging Market Carry Index has achieved a return of 16.71% this year, the best since 2009 [3]. Group 2: Investor Sentiment - A recent survey by Bank of America involving 300 investors revealed that there is almost no pessimism towards emerging markets [4]. - HSBC's December survey indicated that bearish views on emerging markets have completely disappeared, with net bullish sentiment reaching a historical high [4]. - Strategas estimates that U.S. ETFs focused on emerging market stocks attracted nearly $31 billion in 2025, while emerging market bond funds absorbed over $60 billion [4]. Group 3: Economic Outlook - Emerging markets are expected to benefit from a more accommodative global financial environment and stable internal policies, with growth anticipated to outperform developed economies [6]. - The Asian region is highlighted as a key growth engine, with potential for pro-business governments emerging from elections in Latin America [6]. - Structural trends such as geopolitical reshuffling and supply chain restructuring are expected to favor emerging markets, particularly in Asia [5]. Group 4: Investment Strategies - Emerging market bonds are seen as attractive due to high yields and diversification benefits, with a focus on Central and Eastern Europe, parts of Latin America, and Asia [6]. - Investment in technology sectors and industries with clear advantages, such as the electric vehicle supply chain and renewable energy in China, is recommended [6]. - The outlook for Indian markets is positive, driven by the "Make in India" initiative, which is expected to boost manufacturing and infrastructure [6]. Group 5: Currency and Interest Rate Dynamics - The trajectory of the U.S. economy is crucial for the sustained strong performance of emerging market currencies, with expectations of a slowdown encouraging the Fed to maintain loose monetary policy [9]. - JPMorgan and Morgan Stanley predict that emerging markets will benefit from a weaker dollar and the investment boom in AI [9]. - Emerging market currency volatility is currently low, but there are concerns that unfavorable exchange rate movements could erase gains [11].

Invesco is an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life.Be the first to know! Sign up for Invesco US Blog and get expert investment views as they post.Disclosure for all Invesco US articles: Before investing, carefully read the prospectus and/or summary prospectus and carefully consider the investment objectives, risks, charges and expenses. The information provided is for educational purposes only and does not constitute a ...

Core Insights - Invesco has successfully restructured its flagship $399 billion fund, QQQ, from a unit investment trust to an open-end fund, achieving over 51% shareholder approval [1] - The restructuring will lead to a reduction in fees from 20 basis points to 18, benefiting investors [1] - This change allows Invesco to significantly increase its annual revenue, redirecting over $100 million previously restricted to marketing [3] Investor Impact - Shareholders will no longer receive outreach calls from third parties hired by Invesco to encourage voting, which some found intrusive [2] - The reclassification enables Invesco to reinvest income and utilize securities lending, enhancing flexibility for better investor outcomes [3] Fund Performance - QQQ has performed well in 2023, returning over 20% year to date, outperforming the S&P 500, which is up over 16% [4] - The fund has attracted approximately $16 billion in net inflows this year, despite experiencing net outflows of around $1 billion in November [4] - QQQ is currently the fourth-largest US ETF, with Vanguard's Total Stock Market ETF (VTI) at $569 billion and Vanguard's Growth ETF (VUG) at $206 billion ahead of it [4]

Invesco is an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life.Be the first to know! Sign up for Invesco US Blog and get expert investment views as they post.Disclosure for all Invesco US articles: Before investing, carefully read the prospectus and/or summary prospectus and carefully consider the investment objectives, risks, charges and expenses. The information provided is for educational purposes only and does not constitute a ...

Invesco is an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life.Be the first to know! Sign up for Invesco US Blog and get expert investment views as they post.Disclosure for all Invesco US articles: Before investing, carefully read the prospectus and/or summary prospectus and carefully consider the investment objectives, risks, charges and expenses. The information provided is for educational purposes only and does not constitute a ...

Core Viewpoint - Invesco is an independent investment management firm focused on enhancing the investment experience for individuals [1] Group 1 - Invesco emphasizes the importance of understanding investment objectives, risks, charges, and expenses before making investment decisions [1] - The firm provides educational content but does not offer specific investment recommendations or tax advice [1] - Invesco's opinions are based on current market conditions and may change without notice, indicating a dynamic approach to investment management [1] Group 2 - Invesco Distributors, Inc. serves as the US distributor for Invesco Ltd.'s retail products and collective trust funds [1] - The company operates through various affiliated investment advisers that provide advisory services without selling securities [1] - Invesco Unit Investment Trusts are distributed by Invesco Capital Markets, Inc. and other broker-dealers, highlighting the firm's extensive distribution network [1]