Invesco<span class="company-name-type"> Limited</span> IVZ <span>3.21%</span> Adding more QS to its fund lineup is a wager by the world's fourth-largest issuer of exchange-traded products that investors' love affair with technology stocks will continue.
The Atlanta-based asset manager will launch four new investment products tied to its flagship ETF, the Invesco QQQ Trust Fund. At $ 134 billion, Q, as Wall Street is known, has become one of the largest exchange-traded products in the world and accounts for about 42% of Invesco’s ETF assets.
Vanguard Group & State Street Corp.
“It’s going to be an important part of our growth,” said John Hoffman, head of Invesco of America, ETFs and index strategies. “We are trying to find all the points in the ecosystem and make sure we are there to support it.”
The new offerings have a retail bent and ETFs are rather simple.
Among the new products, Invesco is launching a low-cost version of QQQ, which also sports a lower share price designed for long-term mom-and-pop investors. Invesco Nasdaq 100 ETF (QQQM) will be 5 basis points lower than the 0.2% fee QQQ.
QQQM followed investor trends, namely State Street, launching cheaper versions of its popular funds in an effort to court a wider base of investors, a note to Todd Rosenblut, head of ETFs and mutual fund research at CFRA said in. This is a response from investors showing a clear preference for low-cost ETFs, and the new versions, essentially clones, give asset managers a way around the boundaries of products established as unit investment trusts such as QQQs.
State Street has in recent years created less expensive versions of the SPDR S&P 500 Trust, the world’s largest ETF and SPDR gold shares. According to FactSet, the ratio of half of the fastest growing ETFs of 2019 was 0.05% or less.
“It has become more common for a popular ETF to offer a cheaper alternative in the hope of appealing to a different investor base and yet not lose revenue tied to the submerged product,” Mr. Rosenbluth he said.
Invesco is also launching a junior QQQ offering the second 100 largest Nasdaq stocks (QQQJ) aimed at bringing investors into contact with the next generation of technology leaders. On a backrest by the end of 2010, Nasdaq found that 54 companies in the Junior ETF would have graduated QQQ Trax’s index Nasdaq 100.
“Next 100 [ETF] Features for new, up and coming companies, ”said Lauren Dillard, executive vice president of global information services at Nasdaq, who partnered with Invesco on new products.
Another product, Invesco Nasdaq 100 Index Fund (IVNQX) is not an ETF at all. It is a mutual fund aimed at retirement-account investors, some of whom are prohibited from owning ETFs.
The new suite is rounded out by an actively managed version that will hold 25 shares of QQQ with the largest growth potential (QQQG).
Together, the new funds represent one of Invesco’s biggest and most important product launches since the purchase of OppenheimerFunds in 2019 and a wave of closures in Guggenheim Investments’ ETF business in 2018. Those deals added a host of new offerings, which broadened Invesco’s reach. Overseas, as well as a glare of overwapping and unseen products that Invesco discontinued.
The stakes are high for Invesco. Shareholder activist Tryon Fund Management has made up about 10% of the asset manager, along with a similar stake in smaller rival Janus Henderson Group JHG. 1.61%
PLC, The Wall Street Journal reported earlier this month. Trian seeks to force some consolidation within the industry, creating a counterweight to the world’s largest asset managers. Invesco spokesman said the firm welcomed high-quality investors but declined to comment further.
Mr Hoffman said he did not expect there to be four QQQ offshoots for the development of the flagship fund. QQQ is the second most traded ETF in the US, making it highly liquid, an important component for large institutions that want to trade in and out of certain hiccups.
And in addition to QQQM – ETFs that would be 5 basis points cheaper than QQQ – other offerings play different roles that will lend themselves to new money rather than transfers from QQQ.
While the epidemic has crippled some industries, technology companies have evolved to lean people to work for those companies, so that they can stay connected and entertain themselves with friends and families.
This year has raised QQQ by 39%, broadening the Nasdaq index by 6 percentage points. In the last 10 years, ETFs have grown nearly six times.
But tech stocks are not impermeable. Trade stumbled in September, with the broader stock market dragged along, with concerns ranging from ongoing shocks in coronoviruses to whether stocks had climbed too quickly. According to FactSet, the fund lost more than $ 6 billion on two separate days in September.
FactSet’s data show it grossed about $ 15 billion this year.
Mr. Hoffman says that QQQ and its offshoot funds are more than just a collection of technology companies. These include investment in many sectors that use technology to their advantage, including biotechnology and retail.
“Hoffman said,” Innovation has never been so important. “It can’t be more front and center today [than] During the epidemic. ”
Write Michael on Michael Wursthorn. [email protected]
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