The Nasdaq 100 could be en route to more highs through the rest of 2021, which translates into more strength for ETFs that track the index like the Invesco NASDAQ Next Gen 100 ETF (QQQJ).
The fund has a chock-full of heavy hitters in the tech industry that comprises its top holdings. This includes familiar names like Apple, Microsoft, and Amazon—all beneficiaries of the new societal norms that rely even more heavily on technology and online services.
As such, this is giving QQQJ its 13.7% year-to-date performance and 32% gain in the last 12 months. At a 0.15% expense ratio, whether investors are in it for the long haul or want to use the fund as a strategic short-term play, QQQJ does it with a small price of entry.
QQQ seeks investment results that generally correspond to the price and yield performance of the NASDAQ-100 Index®. To maintain the correspondence between the composition and weights of the securities in the trust and the stocks in the NASDAQ-100 Index®, the adviser adjusts the securities from time to time to conform to periodic changes in the identity and/or relative weights of index securities.
The composition and weighting of the securities portion of a portfolio deposit are also adjusted to conform to changes in the index. QQQ is praised for its liquidity, as well as its all-encompassing exposure to big names in big tech.
As mentioned, QQQJ gives ETF investors big tech exposure, but also with a mid-cap twist. While large cap companies in tech like Apple or Microsoft are solid plays, there are also opportunities to be had in mid-cap companies that aren’t quite household names.
Record Fall In-Store?
Market analysts are forecasting that this fall could bring a strong rally for equities, which could show up in gains for QQQJ. Fundstrat Global Advisors’ co-founder and head of research Tom Lee, thinks investors could see September strength, according to a CNBC article.
“We could have a really strong rally in September,” Lee said on CNBC’s Trading Nation. “We didn’t think there was a window for a 10% correction for most of 2021. The window where we think you could start to have potentially a 10% pullback in October.”
“We get that much closer to tapering,” Lee said, noting potential fiscal and monetary policy risks along with the constant wild card known as the pandemic. “That’s really when the debt ceiling rhetoric comes back, and if there are going to be concerns about the debt ceiling, the bond market could panic.”
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