Invesco ESG NASDAQ Next Gen 100 ETF’s Process Pillar rating is Average, but a strong management team still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy gets an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight liquidity exposure and has a considerable overweight in yield exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a high yield exposure is rooted in holding high dividend-paying or buyback stocks. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Super Micro Computer

ICON

Monolithic Power Systems

Tractor Supply

Western Digital

eBay

NetApp

Seagate Technology Holdings PLC

Zebra Technologies

First Solar

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Invesco ESG NASDAQ Next Gen 100 ETF earns an Average Process Pillar rating. The most substantial contributor to the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The size of the portfolio management team also strengthens the process. With four portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 44%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results of the Nasdaq Next Generation 100 ESG Index®.  The fund generally will invest at least 90% of its total assets in the securities that comprise the underlying index. The underlying index is designed to measure the performance of companies included in the Nasdaq Next Generation 100 Index® (the “parent index”) that also meet the index provider's ESG criteria. The parent index is comprised of securities of the next generation of Nasdaq-listed non-financial companies. The fund is non-diversified. 

 The portfolio is overweight in technology and communication services relative to the category average by 22.6 and 3.9 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and industrials, underweight the average by 10.4 and 8.3 percentage points of assets, respectively. The portfolio is composed of 93 holdings and is about as top-heavy as the category average, with 24.1% of assets in the top 10 holdings. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 28% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Average

Process

Invesco’s team is strong compared with others in the industry, resulting in an Above Average People Pillar rating. There are four managers listed on the fund: Peter Hubbard, Tony Seisser, Michael Jeanette, Pratik Doshi. Experience on the team is abundant, with 12 years of average portfolio management experience. Together, they manage a total of 145 strategies, with solid long-term prospects. The strategies average a Bronze asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Above Average

People

Invesco succeeds in a number of areas but also has its share of subpar offerings, along with many others that land somewhere in the middle. A mid-2023 change of CEO, from longtime chief Marty Flanagan to veteran Invesco executive Andrew Schlossberg, is noteworthy, and several other executives retired or departed in 2023. Portfolio-manager shuffles aimed at bolstering poor performers, which began under Flanagan, have continued under Schlossberg, who told Morningstar his most important aim is bolstering “investment quality.” However, major changes of direction or approach are unlikely. The firm retains a Morningstar Parent rating of Average. 
Invesco’s international-equity teams in Texas and New York remain solid. However, the extensive U.S.-equity lineup needs improvement. Fixed-income offerings run the gamut: The multisector and short-term-bond areas are good, but corporate high-yield is less impressive. The firm’s exchange-traded fund lineup includes the popular Nasdaq-focused QQQ; passive strategies make up around 37% of Invesco’s assets under management. Invesco has not been averse to trying new types of strategies, and it was among the firms that immediately launched a spot bitcoin ETF after SEC approval in early 2024.
The picture outside the United States is mixed. Fund performance has been subpar in Asia, and while the picture has brightened in the United Kingdom and Europe, that region still can’t be considered a strength.

Parent

Invesco ESG Nasdaq Next Gen 100 ETF

QQJG tracks an index of NASDAQ Next Gen 100 stocks screened and weighted based on various environmental, social, and governance factors.

Invesco ESG Nasdaq 100 ETF

There's no denying it. As an investing methodology, environmental, social, and governance (ESG) has endured its share of criticism and regulatory scrutiny.

ESG Not Perfect, but Still Has Long-Term Merit, Says Expert

Environmental, social, and governance (ESG) has endured its share of criticism. The fact remains that plenty of market participants remain committed to this style of capital allocation.

Artificial Intelligence Could Restore Enthusiasm for ESG Investing

As an investing style, ESG has been the target of ample criticism and plenty of negative press. However, that hasn't diminished some investors' enthusiasm for values-based investing.

How ESG Is Discussed Matters

As an investing style, environmental, social, and governance (ESG) has been on the receiving end of much criticism over the past couple of years, stoking outflows from many of the related exchange traded funds last year.

ESG Investing Still Merits Advisors' Consideration

Much has been made of the political criticism of ESG investing. That debate is often framed as a “war.

Hyperbole Abounds in Talk of ESG Demise

As environmental, social, and governance (ESG) investing has evolved, so have asset allocators' and retail investors' demands. Those include more emphasis on social issues and risks.

Emphasis on Social Investing Could Help These ETFs

Assets under management for ESG and sustainable funds peeled back this year. Harsh political rhetoric aimed at this style of investing and lack of regulatory clarity are among the reasons some market participants reduced ESG exposure.

Nasdaq Sustainable Lens Could Benefit These ESG ETFs

The landscape for environmental, social and governance (ESG) investing is evolving and so are market participants' demands. While the “E” hasn't entirely been solved, it's been well-addressed.

More ‘S' Could Accelerate ESG ETF Adoption

For investors who are enthusiastic about environmental, social, and governance (ESG) principles and the application of those principles in investment products, it might seem as though what was once a hot concept is cooling off. A couple of years of anti-ESG rhetoric and high interest rates weighing on growth stocks will do that.

There's Still Room for ESG ETFs to Grow

While environmental, social, and governance criticism remains elevated (and loud) and interest rates are affecting the performance of the related equities and exchange traded funds, ESG-committed investors can find relief on multiple fronts. One example is ongoing commitment to ESG goals and plans found among high-ranking executives, including chief financial officers (CFOs).

ESG Still Priority Among CFOs

Helped by resurgent growth stocks, climate-aligned and ESG investing styles are garnering support this year. Investors are returning to these concepts.

Appetite for Climate, ESG Investing Rebounding

An efficient avenue for asset managers and fund issuers to avoid regulatory scrutiny of products with the environmental, social, and governance (ESG) label is to ensure that those funds live up their ESG ETF billing. That can be accomplished with data-intensive approaches.

Deeper Data Dependency Could Advance ESG ETF Usage

Invesco QQQ

Invesco NASDAQ Next Gen 100 ETF

Invesco Nasdaq 100 ETF

sA slew of recent polls, studies, and surveys confirmed the importance and relevance of ESG investing to younger investors. For advisors and fund issuers alike, those are coveted demographics.

Younger Investors Are Devoted to ESG

Sustainable and ESG ETFs are rebounding this year following some dismal performances in 2022. It's easy to understand why: Growth stocks are the primary drivers of broader market upside in 2023.

How Sustainable Funds Got Their Grooves Back

It's the recipient of much derision, but environmental, social, and governance (ESG) investing has plenty of supporters. It's also piqued the interest of an increasingly large number of values-driven market participants, many of whom are new investors.

ETFs Could Be Ideal ESG Vehicles for New Investors

For experienced and novice investors, there are myriad complexities associated with environmental, social, and governance (ESG) ratings and scoring. Resulting confusion speaks to the advantages of exchange traded funds that employ easy-to-understand approaches to ESG, including the Invesco ESG Nasdaq 100 ETF (QQMG) and the Invesco ESG NASDAQ Next Gen 100 ETF (QQJG).

AI Can Help Investors Navigate ESG

Environmental, social, and governance (ESG) investing has taken some lumps dating back to last year. There was the obvious lethargy of the related strategies as growth stocks — lynchpins in many funds — as interest rates spike.

ESG Maturing, Not Dying

Broadly speaking, environmental, social, and governance (ESG) principles are still important to many companies. However, various macroeconomic headwinds are diverting corporations' attention to other issues.

ESG Priorities Alive and Well in These ETFs

Environmental, social, and governance (ESG) exchange traded funds have captive audiences among registered investment advisors and retail investors. They have also proven adept at attracting assets.

ESG Data Is Coming of Age

As more investors demand environmental, social, and governance (ESG) commitments and disclosures from companies, it stands to reason that boards of directors and high-ranking executives are pondering the value-add proposition offered by ESG.

Evaluating ESG's Role in Creating Value

Generation Z (Gen Z), comprised of those born between 1997 and 2013, is the generation with the youngest adults. As such, there are some investment implications for market participants to be aware of and capitalize on.

This ESG ETF Has Gen Z Inroads

One of the benefits of the environmental, social, and governance (ESG) investing movement is that it spurred a raft of research and studies comparing the performances of companies with strong ESG records and those that are “ESG offenders.

Good Reasons to Avoid ESG Offenders

In recent years, the audience for environmental, social, and governance (ESG) investing strategies expanded in significant fashion, indicating that a broader cross section of market participants finds values-based investing appealing.

ESG ETFs Can Find Audience With Younger Investors

Invesco Solar ETF

Solar stocks are shining in the early innings of 2023. Just look at the Invesco Solar ETF (TAN), which is higher by more than 7% since the start of the year.

Size Up Solar Opportunities in This ETF

With climate-related spending slated to accelerate around the world, investors want to get in on the action and they have plenty of choices for related positioning. Some of those options are refined and focused while others are broad and offer depth.

News for Invesco ESG Nasdaq Next Gen 100 ETF ETF (QQJG)