Displaying items by tag: QQQN

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.

One of the surest ways to deliver value as an advisor is to help clients identify stocks that are poised to see a step change in their growth. If the last decade has shown us anything, it is that tech companies can scale quickly, and their stock prices may move accordingly. With that in mind, we believe one of the best ways to find the next big thing is to check out the VictoryShares Nasdaq Next 50 ETF (QQQN).

The ETF tracks the Nasdaq Q-50 index, and deliberately invests in the 50 stocks next in line to be included into the Nasdaq-100. This accomplishes two critical tasks. First, QQQN puts client capital into Nasdaq stocks that are well established (ranked 101-150 based on market capitalization in the entire Nasdaq Stock Exchange; ex. Financial), but presumably at an earlier stage with still long runways of potential growth. In other words, high profile companies that could become household names. Since 2007, 110 constituents have “graduated” from the Nasdaq Q-50 (the “next 50”) into the full Nasdaq-100*. Just in the last few years, this includes names like Netflix, Facebook, Lululemon, and Expedia, which highlights the rapid pace of innovation that Q-50 stocks may experience and QQQN seeks to capture with its methodology. In 2020 alone, the graduates included Docusign, Peloton, and Moderna among five other companies. Since 2007, in the 12 months prior to “graduating”, these 110 graduates returned 76.2% on average**. QQQN allows investors access to these quick-growing companies before they have experienced the market appreciation that “graduates” them into the Nasdaq-100. Second, buying into QQQN also helps one diversify out of the hyper-concentrated top end of the Nasdaq-100, which is heavily weighted towards just three stocks as of 2020 year-end. We feel this allows potential returns of QQQN to be more in line with those of companies on the cusp of transitioning between mid-cap and large-cap or mega-cap. Taking these two points in combination, the ETF is quite distinct from strategies that track the Nasdaq-100, and tracks an index that is fully complementary rather than competitive.

Finally, another unique aspect of QQQN is that it rebalances quarterly. This construction allows the ETF to both capture the value of potential hyper-growth names and IPOs more nimbly and drop losers more quickly than half-yearly or annual rebalancers. In summary, QQQN offers unique value and relevant exposure to the next generation of innovators.

 N.b. this content was paid for by Victory Capital and is not FINSUM editorial.

Notes: *Source: Nasdaq as of 12/31/2020; Constituent counts by year include some double-counting. For example, Illumina was originally moved into the Nasdaq-100 in 2008, subsequently kicked back out to Q-50, then moved back in 2013. Of the 106 constituent “graduations,” there were 98 unique companies. In addition to Illumina, Ctrip.com International; Green Mountain Coffee Roasters; Hansen Natural; Hologic; J.B. Hunt Transport Services; Netflix; and NXP Semiconductors moved from the Q-50 into the Nasdaq-100 twice during the 2007-2019 period.

** Source: Nasdaq as of 12/31/2020; In the case of the 12 month statistics, names added in 2020 were excluded from averages and medians.

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).

Holdings are as of the date noted and subject to change without notice. 

©2021 Victory Capital Management Inc.

20210416-1593090