One of the elements that can contribute to the success of a new ETF is timing. Does the product in question come to market at a time when its investment objectives are prized and relevant?
The Invesco QQQ Low Volatility ETF (QQLV) checks those boxes. The fund follows the Nasdaq Low Volatility Index. While the ETF is just three months old, it’s age belies its pertinence. That’s because the turbulence seen in equity markets to start 2025 highlights the advantages of low volatility investing.
“Exchange-traded funds investing in U.S. companies that are less sensitive to stock-market turbulence have beaten the S&P 500 and the Nasdaq Composite in the early months of 2025, as investors grapple with uncertainty over economic growth and the potential fallout from President Trump’s erratic trade policies,” reported MarketWatch reporter Isabel Wang.
QQLV Could Be Right for the Times
As noted above, QQLV is just a few months, meaning it’s significantly younger than a slew of competitors in the low volatility ETF space. So it’s reasonable that advisors and investors will measure the rookie Invesco fund against its more seasoned rivals.
While the time frame is admittedly small, QQLV is showing it’s up to the task. YTD, the Invesco fund is beating the largest ETF in the low volatility category by about 100 basis points. Some of QQLV’s impressive start to 2025 is attributable to its reduced reliance on large-cap growth stocks relative to other ETFs that track benchmarks related to the Nasdaq 100 Index.
QQLV devotes just 4.10% of its weight to big growth stocks. Conversely, the ETF allocates more than a quarter of its portfolio to consumer staples. That sector is known for holding steady when more exciting counterparts falter.
“The divergence is clear as day. Investors have bought up companies that sell essential products that still see demand in an economic downturn,” reported Jacob Sonenshine for Barron’s. “Meanwhile they have pulled money out of the discretionary names and tech companies whose sales suffer when shoppers pull back on spending.”
Industrials, which represent nearly 23% of QQLV’s lineup, could also be a source of strength for the ETF as 2025 moves along. That’s particularly if it becomes apparent that the economy is on firmer ground than is currently being implied.
“Industrials stocks are essential for economic growth, covering diverse businesses from manufacturing to transportation. This sector tends to thrive during economic expansions and can benefit from increased government spending on infrastructure projects,” according to Morningstar.
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