The decade of the 2010’s was marked by the meteoric rise of fast-growing companies, many of which have become household names. Not coincidentally, the market dominance of these large-cap tech stocks also powered the popular broad market averages to all-time highs, and their trajectory has been nothing short of remarkable. This begs the question: Which companies are poised to disrupt the status quo to such an extent that they will be the next market dominators? Identifying those stocks and piling in before they are household names is the ultimate challenge for growth-oriented investors. For example, who wouldn’t want to say that they picked up Amazon when it was just a bookseller? The VictoryShares Nasdaq Next 50 ETF (QQQN) offers investors an opportunity—just maybe—to find the next decade's biggest story.

The VictoryShares Nasdaq Next 50 ETF is a passive fund that invests in the constituents of the Nasdaq Q-50 Index, which tracks the 50 non-financial companies that are next in line for inclusion in the iconic Nasdaq-100 Index. In other words, this offers investors an easy way to gain broad exposure to a new generation of innovative companies we feel are poised for growth. These mid-cap firms may be transitioning into large or, possibly, even mega-cap status. It’s an interesting approach that offers growth investors several possible advantages.

For starters, it’s a systematic way to allocate to companies that have already been vetted given that these stocks have demonstrated strong growth to date in terms of their market cap positioning. These companies have long-graduated from fledgling startups. Moreover, this ETF rebalances quarterly, which helps ensure that the portfolio remains updated and in tune with an oft-changing environment. We believe such a quarterly rebalancing is an advantage versus some competitive products that rebalance only annually because it puts QQQN in the position to capture the value of any intriguing, rapidly growing companies and potentially IPOs that immediately become eligible for inclusion in the Nasdaq Q-50 Index. Quarterly rebalancing also ensures that investors aren’t stuck with laggards that have dropped out of candidacy for graduating into the Nasdaq-100 Index.

The current investment environment is indeed tricky and there are many challenges ahead, but there will always be innovative companies that are disrupting the status quo, regardless of market volatility, interest rates, or Federal Reserve policies. The VictoryShares Nasdaq Next 50 ETF offers investors an opportunity to allocate across 50 companies that we believe should be in excellent position to grow. Why not invest in these stocks before they are household names?

Carefully consider a fund's investment objectives, risks, charges and expenses before investing. To obtain a prospectus or summary prospectus containing this and other important information, visit www.vcm.com/prospectus. Read it carefully before investing.

Investing involves risk, including the potential loss of principal. In addition to the normal risks associated with investing, investments in small- and mid-cap companies and narrowly focused investments typically exhibit higher volatility. International investing may involve risk of capital loss from unfavorable fluctuations in currency values, differences in generally accepted accounting principles, or economic or political instability. Technology companies are often subject to severe competition and product obsolescence. The Fund has the same risks as the underlying securities traded on the exchange throughout the day. Redemptions are limited, and commissions are often charged on each trade. ETFs may trade at a premium or discount to their net asset value. The Fund is not actively managed and may be affected by a general decline in market segments related to the Index. The Fund invests in securities included in, or representative of securities included in, the Index, regardless of their investment merits. The performance of the Fund may diverge from that of the Index.

The Nasdaq Q-50 Index is a market-capitalization weighted index designed to track the performance of companies that are next-eligible for inclusion into the Nasdaq-100 Index. The Index is comprised of 50 securities and reflects companies across major industry groups, except financial companies. Nothing in this illustration should be construed as a recommendation of individual holdings or market sectors, but as an illustration of broader themes.

VictoryShares ETFs are distributed by Foreside Fund Services, LLC.

Victory Capital Management Inc. is the adviser to the VictoryShares ETFs. Victory Capital is not affiliated with Foreside Fund Services, LLC. Nasdaq is a registered trademark of Nasdaq, Inc. and its affiliates (together, “Nasdaq”) and is licensed for use by Victory Capital. The product(s) are not issued, endorsed, sold, or promoted by Nasdaq. Nasdaq makes no warranties as to the legality or suitability of, and bears no liability for, the product(s).

©2021 Victory Capital Management Inc.

20210827-1755299

N.b. this is sponsored content and not FINSUM editorial.

(Washington)

Amazon is contacting third-party vendors who use their site to sell goods to tell them that Congress’s new antitrust regulation will limit or bar them from selling through Amazon. This is in response to a series of six bills that have passed the House Judiciary Committee in June that will be making their way to a House vote. The legislation will overall haul major U.S. antitrust regulations seeking to tackle big tech companies like Amazon, Apple, Facebook, and Google. It looks to make it more difficult for these companies to make mergers and acquisitions, discriminate against other businesses on their platforms, and make it easier for state attorneys to bring antitrust cases against them to court. Third-party vendors might be barred from paying Amazon fees for holding and storage, third-party vendors are one of Amazon’s fastest-growing segments of the company. Many of these companies are facing antitrust measures currently and this legislation could only spike that.

FINSUM: Don’t jump off tech just yet. The fundamentals are still great with the FAANGs having great earnings through the pandemic. The final bill could end up being very friendly for the tech giants.

In March 2021, President Biden unveiled his new infrastructure plan, promising “It is not a plan that tinkers around the edges. It is a once-in-a-generation investment in America unlike anything we have seen or done since we built the interstate highway system and the space race decades ago. ”

At the heart of his plan sits a commitment to clean energy provision and carbon neutrality, with hydrogen fuel playing a key role. Among other measures, the plan proposes to fund R&D in advanced hydrogen electrolyzers; build 15 decarbonized hydrogen demonstration projects in economically distressed areas; incentivize the adoption of electric and fuel-cell vehicles (FCEV); remove tax preferences for fossil fuels and redirect them to projects that advance industrial decarbonization; and invest $100 billion in upgrading and modernizing the electric grid. It sets a goal of a carbon-neutral, American-made power sector by 2035.

Hydrogen is one of the leading hopes for Biden and the hundreds of governments, municipalities, and corporations around the world who have committed to reach carbon neutrality within the next few decades. Hydrogen is abundantly available across the planet in the form of water. It's converted into fuel through electrolysis, which separates hydrogen molecules from the water compound. The hydrogen molecules are stored in pressurized containers, then compressed into a fuel cell which allows the energy they hold to be released as electricity.

Until recently, hydrogen fuel production was powered by fossil fuels, but today's green hydrogen uses renewable energy sources, making it environmentally friendly and emissions-free. Hydrogen energy is more stable than other clean power, like solar or wind power; its energy-dense nature supports long-duration discharge cycles to release energy at times and places of peak demand; and because it's a molecule-based fuel, it's appropriate for use cases where electrification isn't an option, like industrial feedstock.

Biden keeps green hydrogen in the spotlight

This week, Biden followed through on his commitment to bring down the cost of green hydrogen fuel production. Jennifer Granholm, the Energy Secretary, announced the "Hydrogen Shot" program that aims to lower the costs of clean hydrogen by approximately 80%, from around $5/kg today to $1/kg by 2030. Granholm referred to it as an "energy earthshot" that's "an all-hands-on-deck call for innovation, collaboration and acceleration of our clean energy economy. "

She continued that the project “sets an ambitious yet achievable cost target to accelerate innovations and spur demand of clean hydrogen. Clean hydrogen is a game changer. It will help decarbonize high-polluting heavy-duty and industrial sectors, while delivering good-paying clean energy jobs and realizing a net-zero economy by 2050.”

Even before the unveiling of Hydrogen Shot, private companies and investors have been picking up on political enthusiasm for green hydrogen and taking bold steps to advance innovation and production. Plug Power, one of the leading producers of hydrogen fuel cells, recently announced plans to invest $84 million in building a fourth hydrogen refinery in the US, this one located in southern Georgia. The plant will use solar electricity to power green electrolysis, and have an initial capacity of 15 tons of hydrogen per day. The company also just revealed a new partnership with French carmakers Renault to produce hydrogen fuel-cell vans . Together with Biden's exciting news, these developments pushed Plug Power's stock price up by 29.58% in 30 days, from $24.58 to $31.85 .

UK-based ITM power announced a tender pipeline of £607 million, a rise of 131% on 2020, and work in progress totalling £35.4 million, a rise of 62% from the previous year. Neil Shah, director of research at the Edison Group, connects this positive performance with governmental decision-making, saying “The increasing global recognition of the potential for hydrogen to support green power should bring confidence to both ITM Power and their investors. The company has noted the explicit statement of electrolyzer targets from eight governments, and recent reports on global energy outlooks have recognized the necessity of rapid development in the sector.”

Another leading hydrogen stock, Bloom Energy, just entered a partnership with the Idaho National Laboratory to test the outcomes of using nuclear energy to create clean hydrogen with Bloom Energy's solid oxide, high-temperature electrolyzer, the results of which could impact the future of hydrogen fuel production.

In the public sector, the Port of Los Angeles and its partners rolled out five new hydrogen-powered FCEVs and opened two hydrogen fueling stations. The achievement is part of the $82.5 million Shore-to-Store (S2S) program, a grand vision to improve air quality and address climate change statewide. The Port project involves over a dozen public and private sector partners to develop zero-emissions heavy-duty vehicles, to maintain shipment throughput at the port without adding to pollution levels.

The global hydrogen market is keeping pace

Nor is hydrogen fuel activity limited to the US. Japan, South Korea, and the EU join the US with plans to invest more than $100 million of public funds in hydrogen fuel cell technology development . While the US and Canada are the fastest growing market segments, encouraged by incentives through emissions regulations , Asia-Pacific accounted for the largest revenue share in 2020, and the trend is expected to continue till 2028 . It's possible that a friendly rivalry could emerge between regions, which will help drive revenue for hydrogen stocks everywhere in the world.

Europe is rapidly emerging as a key player in the green hydrogen scene, with the EU's Fuel Cells and Hydrogen Joint Undertaking (FCHJU) rolling out ambitious proposals to deploy 3.7 million fuel cell passenger vehicles, 45,000 fuel cell trucks and buses, 500,000 fuel cell light commercial vehicles (LCVs), and 3,700 refueling stations by 2030. Fuel cell solutions provider Ballard Power Systems just received an order for 13 fuel cell modules for fuel cell electric buses in the city of Frankfurt, Germany. Rob Campbell, Chief Commercial Operator at Ballard, says "The orders we are announcing today are indicative of the growing European and global adoption of zero-emission FCEBs."

The Asia-Pacific region is also surging ahead with green hydrogen development. Japan's plans to be carbon-free by 2050 rely heavily on hydrogen power, and the government just announced that it will invest up to 370 billion yen ($3.4 billion) in two projects to accelerate green hydrogen R&D and adoption. One project aims to create a large-scale supply chain of hydrogen, while the other intends to build a large-scale hydrogen production plant using energy from renewable sources. Writing in the Wall Street Journal, analyst Phred Dvorak suggests that Japan's projects could drive hydrogen adoption globally, saying "If it succeeds, it could also lay the groundwork for a global supply chain that would finally let hydrogen come into its own as an energy source and further sideline oil and coal—similar to the way the country pioneered liquefied natural gas in the 1970s. "

Green hydrogen adoption is speeding up

For the moment, one of the biggest barriers to hydrogen adoption is the cost per kilogram of the fuel. However, tax breaks for clean power and penalties for fossil fuel use are helping lower the relative costs of hydrogen fuel, while the actual cost of production is also diminishing. A report from the California Energy Commission predicted that green hydrogen could fall to around $1-2/kg by 2050 , and another source estimated that hydrogen fuel production costs will have dropped by 30% by 2030 . The new Hydrogen Shot project aims to significantly speed up this trend, with the goal of lowering costs by 80% and reaching the target price of $1/kg by 2030.

The decline in fuel production costs is, as analysts had hoped, being accompanied by a rise in fuel production capacity. Hydrogen fuel production is predicted to jump one-thousand-fold globally, or by over 200GW, by 2040. It's expected that as the technology and supply chain matures, the average size of a hydrogen electrolyzer project will expand from 1-10MW to 100-500MW by 2024. Richard Howard, research director at Aurora Energy Research, states “The growth of the hydrogen electrolyser pipeline is an early indication of the rapid rollout of hydrogen infrastructure that we are likely to see in the coming years." It's growing particularly swiftly in Europe, where capacity is on track to rise from around 200MW today to 40GW by 2030.

These positive developments are encouraging optimistic predictions for the green hydrogen market. One study forecasts growth of 54.7% compound annual growth rate (CAGR) between 2021 and 2028, with the market rising from $0.17 billion in value in 2019 to $9.83 billion by 2028 . As a result, and despite hydrogen stocks in general seeing a downturn at the beginning of 2021, many analysts are recommending green hydrogen stocks for investors who want to be part of a disruptive new vertical while meeting their desires for ESG (Environmental, Social and Governance–aware) investing.

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^[1] "Biden Details $2 Trillion Plan to Rebuild Infrastructure and Reshape the Economy" March 31, 2021 https://www.nytimes.com/2021/03/31/business/economy/biden-infrastructure-plan.html

^[1] "Biden Details $2 Trillion Plan to Rebuild Infrastructure and Reshape the Economy" March 31, 2021 https://www.nytimes.com/2021/03/31/business/economy/biden-infrastructure-plan.html

^[1] "Biden administration launches program to cut cost of climate-friendly hydrogen production" June 7, 2021 https://news.yahoo.com/biden-administration-launches-program-cut-121558346.html

^[1] "Green hydrogen leads off US energy earthshots in 'all hands on deck' technology call" June 7, 2021 https://www.rechargenews.com/energy-transition/green-hydrogen-leads-off-us-energy-earthshots-in-all-hands-on-deck-technology-call/2-1-1021584

^[1] "Plug Power Is Still Undervalued as the Good News Keeps Coming" June 10, 2021 https://www.nasdaq.com/articles/plug-power-is-still-undervalued-as-the-good-news-keeps-coming-2021-06-10

^[1] "Hydrogen fuel company set to build $84M plant in Camden County" June 11, 2021 https://www.news4jax.com/news/georgia/2021/06/11/hydrogen-fuel-company-set-to-build-84m-plant-in-camden-county/

^[1] "Is PLUG Stock A Buy As It Teams With European Auto Giant?" June 11, 2021  https://finance.yahoo.com/m/3662e412-a9b6-3048-9f9d-571aee7fdb8f/is-plug-stock-a-buy-as-it.html

^[1] "Plug Power Stock Went Up By Over 29% In The Last 30 Days" June 12, 2021 https://via.news/markets/plug-power-stock-went-up-by-over-29-in-the-last-30-days/

^[1] "Electrolyser manufacturer ITM Power order backlog hits £154m" June 10, 2021 https://www.energyvoice.com/renewables-energy-transition/hydrogen/329209/itm-power-order-backlog/

^[1] "Bloom Energy, national laboratory to test hydrogen generation from nuclear power" May 18, 2021 https://www.spglobal.com/platts/en/market-insights/latest-news/electric-power/051821-bloom-energy-national-laboratory-to-test-hydrogen-generation-from-nuclear-power

^[1] "Port Of Los Angeles Demonstrates Hydrogen Fuel Cell Electric Trucks" June 10, 2021 https://www.fleetequipmentmag.com/port-los-angeles-hydrogen-fuel-cell-electric-trucks/

^[1] Hydrogen Vehicle Market Forecast, Trend Analysis & Competition Tracking - Global Review 2021 to 2031

https://www.factmr.com/report/685/hydrogen-vehicle-market

^[1] "Global Automotive Fuel Cell Markets, 2021-2028" May 28, 2021 https://finance.yahoo.com/news/global-automotive-fuel-cell-markets-082800012.html

^[1] "Hydrogen Generation Market Size, Share & Trends Analysis Report" March 2021 https://www.grandviewresearch.com/industry-analysis/hydrogen-generation-market

^[1] Hydrogen Vehicle Market Forecast, Trend Analysis & Competition Tracking - Global Review 2021 to 2031 https://www.factmr.com/report/685/hydrogen-vehicle-market

^[1] Fuel cell electric buses "Ballard Announces Follow-On Order for Fuel Cell Modules to Power 13 Solaris Buses in Frankfurt" May 27, 2021 https://www.prnewswire.com/news-releases/ballard-announces-follow-on-order-for-fuel-cell-modules-to-power-13-solaris-buses-in-frankfurt-301301337.html

^[1] "Japan Sets Aside $3.4B for Hydrogen R&D" May 18, 2021 https://www.oedigital.com/news/487734-japan-sets-aside-3-4b-for-hydrogen-r-d

^[1] "How Japan’s Big Bet on Hydrogen Could Revolutionize the Energy Market" June 13, 2021 https://www.wsj.com/articles/japans-big-bet-on-hydrogen-could-revolutionize-the-energy-market-11623607695

^[1] "Roadmap for the Deployment and Buildout of Renewable Hydrogen Production Plants in California. CEC. Publication Number: CEC-600-2020-002" Reed, Jeffrey, Emily Dailey, Brendan Shaffer, Blake Lane, Robert Flores, Amber Fong, G. Scott Samuelsen. 2020. https://cafcp.org/sites/default/files/Roadmap-for-Deployment-and-Buildout-of-RH2-UCI-CEC-June-2020.pdf

^[1] "Hydrogen in aviation: how close is it?" October 8, 2020 https://www.airbus.com/newsroom/stories/hydrogen-aviation-understanding-challenges-to-widespread-adoption.html

^[1] "Hydrogen electrolyser market booms with '1,000-fold' growth in frame by 2040: Aurora" May 11, 2021 https://www.rechargenews.com/energy-transition/hydrogen-electrolyser-market-booms-with-1-000-fold-growth-in-frame-by-2040-aurora/2-1-1009199

^[1] "Green Hydrogen Market to Garner $9.83 Billion by 2028: Allied Market Research" May 27, 2021 https://www.globenewswire.com/en/news-release/2021/05/27/2237557/0/en/Green-Hydrogen-Market-to-Garner-9-83-Billion-by-2028-Allied-Market-Research.html

Important Disclosures:

Read more about HDRO here, including current holdings and performance: https://www.defianceetfs.com/hdro/. Fund holdings are subject to change and should not be considered recommendations to buy or sell any security.

The Fund’s investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company. Please read carefully before investing. A hard copy of the prospectuses can be requested by calling 833.333.9383.

Investing involves risk. Principal loss is possible. As an ETF, HDRO (the “Fund”) may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. The Fund is not actively managed and would not sell a security due to current or projected under performance unless that security is removed from the Index or is required upon a reconstitution of the Index. It is not possible to invest directly in an index.

A portfolio concentrated in a single industry or country, may be subject to a higher degree of risk. Specifically, the Index (and as a result, the Fund) is expected to be concentrated in hydrogen and fuel cell companies. Such companies may depend largely on the availability of hydrogen gas, certain third-party key suppliers for components in their products, and a small number of customers for a significant portion of their business.

The Fund is considered to be non-diversified, so it may invest more of its assets in the securities of a single issuer or a smaller number of issuers. Investments in foreign securities involve certain risks including risk of loss due to foreign currency fluctuations or to political or economic instability. This risk is magnified in emerging markets. Small and mid-cap companies are subject to greater and more unpredictable price changes than securities of large-cap companies.

HDRO is new with a limited operating history.

Opinions expressed are subject to change at any time, are not guaranteed, and should not be considered investment advice.

Commissions may be charged on trades.

The Defiance ETFs are distributed by Foreside Fund Services, LLC.