ETF Edge

Tech investors could 'catch lightning in a bottle one more time' with this ETF, market analyst says

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Top ETF trends to watch: Active management, Invesco's new QQQ ETF and more

There's a new tech fund in town.

The new Invesco Nasdaq Next Gen 100 ETF (QQQJ), a "junior" version of the issuer's incredibly popular Invesco QQQ Trust ETF (QQQ), launched on Oct. 13 to a good deal of fanfare from investors looking to get in on the next growth trade.

Based on the Nasdaq Next Generation 100 Index, which tracks the 100 next-largest non-financial companies in the Nasdaq after the original Nasdaq 100, QQQJ counts less-familiar tech stocks such as Marvell Technologies and Atlassian among its top holdings.

The ETF is down a little over 1% since its launch.

Given the success of QQQ, the fifth-largest ETF on the market, WallachBeth Capital managing director Andrew McOrmond was "not surprised" to see Invesco try its hand at another innovative venture.

"I expect them to get some traction with this ETF," he told CNBC's "ETF Edge" on Monday.

QQQJ's debut also comes at a time when investors are growing concerned about the big runs in stocks such as Facebook, Amazon, Apple, Microsoft and Apple, and the underlying companies' run-ins with Congress.

"We're in a pandemic-driven or pandemic ... solutions-driven economy where the companies that are making people's lives easier are the companies that people are investing [in]," McOrmond said. "The QQQ ... will always get assets and certainly is a place for dollars in the FAANG [stocks], but they're coming under some fire, right? So, I think this serves a different investor base and the next leg of growth."

Tom Lydon, the CEO of ETF Trends and ETF Database, said one advantage of QQQJ — which also includes names such as Garmin, Lyft and Zynga — was its diversification offering.

"The key is diversification," Lydon said in the same "ETF Edge" interview. "Going forward, especially as we're seeing rumblings of antitrust discussions, are we going to be as confident in those FAANG stocks going forward? Or here's an opportunity to maybe invest in the future FAANG stocks while you can diversify away and maybe catch lightning in a bottle one more time in the form of this next ETF."

QQQJ climbed by nearly 1% on Friday.

Disclosure: Invesco is the sponsor of CNBC's "ETF Edge."

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