This article was originally published on ETFTrends.com.
On this episode of the "ETF of the Week" podcast, VettaFi's Head of Research, Todd Rosenbluth, discussed the Invesco Nasdaq 100 ETF (QQQM) with Chuck Jaffe of Money Life. The pair discussed several topics related to the ETF, in order to give investors a deeper understanding of it.
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Chuck Jaffe: One fund, on point for today. The expert to talk about it. This is the ETF of the Week!
Welcome to the ETF of the Week, where we examine trending, new, newsworthy, unique, and intriguing exchange-traded funds with Todd Rosenbluth, who's the head of research at VettaFi. And at VettaFi.com, you'll find all the tools and research you need to become a savvier, smarter investor in ETFs.
Todd Rosenbluth, great to chat with you again!
Todd Rosenbluth: It's great to be back, Chuck!
Chuck Jaffe: Your ETF of the Week is…
Todd Rosenbluth: The Invesco Nasdaq 100 ETF. QQQM.
Chuck Jaffe: QQQM, the Invesco Nasdaq 100 ETF. This is a fund that has been, well, riding the wave. It's well thought of by everybody. Why is it the ETF of the Week now?
Todd Rosenbluth: A few reasons. So, QQQM just hit $100 billion in assets under management. It also has received new competition from iShares and from State Street that now offer slightly cheaper products. I think a lot of people are focused on the Nasdaq 100 because it added exposure to SpaceX, but actually SpaceX is quite small, and what we've seen is other companies outside of the traditional Mag Seven have gained traction.
Micron is now a top-five position overall. The Nasdaq 100 is performing great. This is a low-cost, liquid way of getting exposure, despite new competition.
Chuck Jaffe: At the same time, you know, we've been talking a lot about actively managed ETFs. This is the classic "just buy the index." And it's a volatile index. Again, this scores well—if you're looking at Morningstar's data, five stars; if you're looking at Lipper data, it gets the highest rating in everything but preservation of capital, where it's in the middle of the road.
And by just about every measure, it's hard to be disappointed with this fund. How should somebody be using it? And if they don't have this fund yet, do you want to add what amounts to a core fund to a portfolio that has other stuff in the core?
Todd Rosenbluth: So, a few things here. QQQM, for many people, has been the growth-oriented part of their core. So, you might own exposure to the S&P 500, which is a mixture of growth and value stocks. QQQM, because it excludes financials and because it's market-cap weighted, it's very growth-oriented. Heavy exposure to technology. More modest exposure to consumer discretionary and communication services stocks.
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