ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Direct Indexing
    • Disruptive Technology
    • Energy Infrastructure
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Financial Literacy
    • Fixed Income
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Multifactor
    • Night Effect
    • Portfolio Strategies
    • Responsible Investing
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ETF Education Channel
  2. Election Day May Be Meaningful for These Invesco ETFs
ETF Education Channel
Share

Election Day May Be Meaningful for These Invesco ETFs

Tom LydonOct 27, 2022
2022-10-27

2022’s midterm election day is less than two weeks away, confirming investors are right to ponder how various outcomes will affect risk assets. What Congress will look like after the election remains to be seen, but at the moment, consensus is building that government will be dividend after the votes are counted. One of the most effective ways to approach election-related approaches is to leave stock picking to pros and embrace broad-based funds such as the Invesco QQQ Trust (QQQ B+) and the Invesco NASDAQ 100 ETF (QQQM B).

QQQ and QQQM don’t track the S&P 500. Rather, the Invesco ETFs follow the Nasdaq-100 Index, but the index is often highly correlated with the S&P 500, indicating there could be merit in evaluating these funds in advance of and after Election Day.

“Whether it’s a presidential election or a midterm election, the index (S&P 500) has performed very well in the preceding couple of weeks. I was surprised to see volatility muted heading into the election. Off years have a higher standard deviation of returns than election years,” notes Schaffer’s Investment Research Senior Quantitative Analyst Rocky White. “One theory could be that investors are hopeful about the upcoming elections but waiting for the results before making big moves.”

In what could be good news for QQQ and QQQM, Schaeffer’s data indicate that in the previous 18 midterm election years, the S&P 500 moved higher over the two weeks leading up to the election, posting an average gain of 1.50%.

Regarding QQQ and QQQM’s near-term, election-related fortunes, it pays to remember history doesn’t always repeat, but it often rhymes. To that end, it’s worth noting the S&P 500 has a noteworthy post-Election track record.

“The reaction to midterm elections has been positive, averaging a gain of 0.65% with 78% of the returns positive. That’s different from the reaction to presidential elections in which the S&P 500 has averaged a loss of 0.31% and just 44% of the returns positive. During non-election years, the day after what would be election day has averaged a small loss, with 61% of returns positive. As expected, the day after elections have a higher standard deviation of returns than the returns in non-election years,” adds White.

For investors looking to hold QQQ or QQQM over longer holding periods, it’s worth noting that over the past 18 midterm election years, the S&P 500 was higher six months following the election, as noted by Schaeffer’s.

For more news, information, and strategy, visit the ETF Education Channel.

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X