Invesco ESG NASDAQ 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 earns 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 quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a high quality exposure is rooted in holding stocks that are consistently profitable, growing, and have solid balance sheets. 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

Microsoft

Apple

NVIDIA

Broadcom

Amazon

Advanced Micro Devices

Linde

Alphabet

Netflix

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 100 ETF earns an Average Process Pillar rating. The leading factor in 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 investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results (before fees and expenses) of the Nasdaq-100® ESG Index(the “underlying 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-100® Index (the “parent index”) that also meet the index provider's ESG criteria. The parent index includes securities of 100 of the largest domestic and international non-financial companies listed on the Nasdaq Stock Market LLC based on market capitalization. The fund is non-diversified. 

 The portfolio is overweight in technology by 20.0 percentage points in terms of assets compared with the category average, and its consumer defensive allocation is similar to the category. The sectors with low exposure compared to category peers are financial services and healthcare, underweight the average by 7.8 and 6.4 percentage points of assets, respectively. The strategy owns 96 securities and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 47.3% of the strategy's assets were concentrated in the top 10 fund holdings, as opposed to the category average's 53.2%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 14% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Average

Process

Invesco ESG NASDAQ 100 ETF benefits considerably from its team, earning it 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 a Bronze asset-weighted average Morningstar Medalist Rating, demonstrating their potential 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 100 ETF

QQMG tracks an index of NASDAQ-100 stocks screened and weighted based on various environmental, social, and governance criteria.

Invesco ESG Nasdaq Next Gen 100 ETF

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

There's still a strong fundamental case for accessing stocks with solid sustainability traits. But for some investors, it can be cumbersome to identify multiple names fitting that bill.

This ETF Holds Some Great Sustainability Stocks

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

In a perfect world, companies would adopt ESG in the essence of doing the right thing and proving altruism. However, that's not always the case.

ESG Adoption Can Be Sales Driver for Some Companies

The industry-level applications of artificial intelligence (AI) are potentially limitless, and renewable energy is among the areas ripe for a broader embrace of AI. There are inklings that the intersection of AI and clean energy is increasing and will continue doing so over the long term.

AI Could Play Pivotal Role in Renewable Energy Transition

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

Broadly speaking on both counts, ESG funds posted solid returns last year. But many investors pulled capital from these products with some actively managed funds being the most afflicted by outflows.

This ETF Has the Right ESG Approach

One of the primary hurdles to broader adoption of environmental, social and governance (ESG) investing principles and the related funds has been long-lacking clarity and regulatory framework covering ESG ratings and regulations. Give the Europe Union (EU) credit because that collection of countries is working to change the aforementioned issues.

ESG Regulations Moving in Right Direction

As an investing style, environmental, social, and governance (ESG) incurred significant controversy and criticism over the past few years. And while some ESG funds suffered outflows last year, there's evidence some of the most vocal critics of ESG are taking it easy for now.

This ETF Could Make ESG Stylish Again

Environmental, social and governance (ESG) investing endured political controversies, regulatory scrutiny and tepid fund-level demand in 2023. But obituaries weren't penned for ESG this year, nor should they have been.

Some Positive ESG Trends Emerged in 2023

Invesco QQQ

Invesco Nasdaq 100 ETF

Over the past several years, the population of ESG exchange traded funds expanded at a feverish pace. That rapid expansion has made it easy for some potentially strong funds to get lost in the shuffle.

QQMG Has Rising Start Potential Among ESG 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

In news that may be surprising to experienced investors and registered investment advisors, a significant percentage of market participants still don't know what environmental, social, and governance (ESG) is, indicating that more education is needed to drive broader adoption of these types of investment products, including exchange traded funds.

More Education Essential to ESG Adoption

Global money managers are still somewhat enthusiastic about ESG investing and continue using those principles in securities evaluation. But conquering the issue of greenwashing remains a top priority.

ESG Still Popular, But Money Managers Have Concerns

Greenwashing — an organization's effort to boast of its environmental, social, and governance credentials when it's actually lacking in that department — is one of the primary knocks against ESG as an investing style. Greenwashing fortifies critics' arguments against ESG while potentially subjecting offending companies to scorn from regulators and market participants.

Another Reason ESG Credibility Matters

California is extending its reputation for forward-thinking carbon reduction and climate change policy. Lawmakers there recently passed two pieces of legislation that could prove relevant to investors.

New California Law Could Put Spotlight on This ETF

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 NASDAQ Next Gen 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).

News for Invesco ESG Nasdaq 100 ETF ETF (QQMG)