This ETF isn't as heralded as its larger relatives, but it's one to watch this month, and it could be a star next year.Issuers of exchange-traded funds (ETFs) are nothing if not inventive. One of the ways they find success with new products is to tie them to established, successful funds.The Invesco NASDAQ Next Gen 100 ETF (QQQJ +1.03%) is an example of that phenomenon. This ETF follows the Nasdaq Next Generation 100 Index, which is equivalent to a "junior varsity" of the Nasdaq-100. In essence, this fund i ...

Core Insights - The article highlights the dominance of the "Magnificent Seven" in AI investing, suggesting that there are other underappreciated AI investment opportunities available [2][4]. Group 1: AI Investment Landscape - Many investors are primarily aware of large-cap AI stocks, limiting their knowledge to a few prominent names [1][2]. - The Invesco NASDAQ Next Gen 100 ETF (QQQJ) is presented as a viable option for investors seeking exposure to lesser-known AI equities [3][4]. Group 2: Notable Companies in QQQJ - Seagate Technologies (STX) and Western Digital (WDC) are identified as two stocks that merit more attention in the AI space, collectively representing nearly 4% of QQQJ's holdings [5][6]. - Seagate's nearline hard drives are crucial for hyperscale cloud storage, with contracts extending visibility into mid-2026, ensuring stable revenue streams for cloud service providers [6][7]. - Western Digital is positioned well in the AI storage market, with its agentic AI initiatives being recognized as a significant growth area [6][7].

Core Viewpoint - The Invesco NASDAQ Next Gen 100 ETF (QQQJ) is a passively managed fund designed to provide exposure to the Large Cap Growth segment of the US equity market, with assets exceeding $645.26 million [1]. Group 1: Fund Overview - QQQJ was launched on October 13, 2020, and is sponsored by Invesco [1]. - The fund targets large cap companies, which typically have market capitalizations above $10 billion, known for their stability and predictable cash flows [2]. Group 2: Growth Stocks Characteristics - Growth stocks generally exhibit higher sales and earnings growth rates, expected to outperform the broader market, but they come with higher valuations and volatility [3]. Group 3: Cost Structure - The ETF has an annual operating expense ratio of 0.15%, making it one of the least expensive options in its category, with a 12-month trailing dividend yield of 0.64% [4]. Group 4: Sector Exposure and Holdings - The ETF has a significant allocation to the Information Technology sector, comprising about 34.7% of the portfolio, followed by Healthcare and Consumer Discretionary [5]. - Alnylam Pharmaceuticals Inc (ALNY) represents approximately 2.58% of total assets, with the top 10 holdings accounting for about 18.37% of total assets under management [6]. Group 5: Performance Metrics - QQQJ aims to match the performance of the NASDAQ NEXT GENERATION 100 INDEX, which includes the largest 100 Nasdaq-listed non-financial companies outside of the NASDAQ-100 Index [7]. - The ETF has increased by about 9.6% year-to-date and approximately 23.95% over the past year, with a trading range between $25.48 and $33.71 in the last 52 weeks [8]. Group 6: Alternatives and Comparisons - The ETF carries a Zacks ETF Rank of 3 (Hold), indicating it is a viable option for investors seeking exposure to the Large Cap Growth area [10]. - Alternatives include the Vanguard Growth ETF (VUG) and Invesco QQQ (QQQ), with VUG having $181.18 billion in assets and an expense ratio of 0.04%, while QQQ has $359.78 billion and charges 0.2% [11]. Group 7: Market Trends - Passively managed ETFs are gaining popularity among both institutional and retail investors due to their low cost, transparency, flexibility, and tax efficiency, making them suitable for long-term investment strategies [12].

Market Overview - The Nasdaq Composite Index has been reaching new records, driven by strong corporate earnings, AI optimism, and expectations of Federal Reserve policy support [1] - ETFs tracking the Nasdaq, such as Invesco QQQ and QQQM, have gained momentum alongside the index [1] Earnings Season - The second-quarter earnings season has started strong, with S&P 500 earnings from 62 companies up 9.3% year-over-year, supported by a 5.8% increase in revenues [2] - Approximately 82.3% of companies have beaten EPS estimates, indicating a favorable outlook for future earnings [2] AI Impact - The generative AI trend is a significant growth driver for Nasdaq, with increased demand for data centers, GPUs, and AI-focused software [4] - Companies like Advanced Micro Devices, Broadcom, and Palantir are experiencing heightened investor interest due to their involvement in AI [4] Interest Rate Expectations - Markets are anticipating at least one rate cut by the Federal Reserve later this year, which would benefit high-growth tech stocks sensitive to borrowing costs [5] - Fed Chair Jerome Powell's upcoming speech may provide further insights into monetary policy direction [5] Global Investment Trends - International investors are increasingly returning to U.S. tech stocks, viewing them as a safe haven amid geopolitical tensions and economic uncertainty in other regions [6] - This trend is contributing to capital inflows into Nasdaq-tracking ETFs like QQQ and QQQM [6] ETF Highlights - Invesco QQQ (QQQ) has an AUM of $357.1 billion and an average daily volume of 44 million shares, charging 20 bps in annual fees [7] - Invesco NASDAQ 100 ETF (QQQM) has lower annual fees of 15 bps and an AUM of $55.1 billion, with a focus on the top three firms [9] - First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW) has an AUM of $1.9 billion and charges 55 bps in annual fees [10] - Invesco NASDAQ Next Gen 100 ETF (QQQJ) holds 111 securities with an AUM of $629.1 million and charges 15 bps in annual fees [11] - Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE) has an AUM of $1.2 billion and charges 35 bps in annual fees [12] Conclusion - The momentum of the Nasdaq is likely to be tested with major earnings reports from tech companies, but the current sentiment remains bullish [13]

Core Insights - The Nasdaq Composite Index has turned positive for the first time since February 21, driven by robust earnings, renewed AI optimism, and easing trade tensions [1] - Investor confidence has increased regarding President Trump's trade policies, alleviating recession fears [1][3] Trade Tensions - Temporary tariff reductions on Chinese goods from 145% to 30% and on U.S. goods from 125% to 10% have been implemented for 90 days [3] - The implementation of a 50% tariff increase on all EU products has been postponed from June 1 to July 9 [3] - Progress in trade negotiations with China, Japan, and the EU remains unclear [4] Technology Sector Performance - The technology sector, particularly semiconductor companies like NVIDIA and Broadcom, has been a key driver of the Nasdaq's rebound [5] - NVIDIA's market capitalization has reached $3.45 trillion, with a nearly 50% increase in stock price since early April, adding over $1 trillion in market cap [6] - Broadcom is nearing record highs, driven by its AI product line and the acquisition of VMware [6] Earnings Overview - First-quarter earnings for 477 S&P 500 members are up 11.4% year-over-year, with revenues increasing by 4.4% [7] - 74.2% of companies beat EPS estimates, and 62.9% exceeded revenue estimates, with the technology sector showing stronger-than-expected performance [7][8] ETFs in Focus - Invesco QQQ (QQQ) has an AUM of $333.9 billion and an average daily volume of 47 million shares, charging 20 bps in annual fees [9] - Invesco NASDAQ 100 ETF (QQQM) has lower annual fees of 15 bps and an AUM of $48.4 billion [10][11] - First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW) has an asset base of $1.8 billion and charges 55 bps in annual fees [12] - Invesco NASDAQ Next Gen 100 ETF (QQQJ) holds 109 securities with an AUM of $605 million and charges 15 bps in annual fees [13] - Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE) has an AUM of $1.1 billion and charges 35 bps in annual fees [14]