SPMD - QQQJ: Nasdaq's Next Generation Stocks Disappoint
2024-02-08 19:55:29 ET
Summary
- QQQJ tracks the "Next Generation" of Nasdaq stocks, or the 101-200 largest non-financial stocks listed on the Nasdaq. QQQJ's expense ratio is 0.15%, and it has $675 million in assets.
- Seeking to piggyback off the success of QQQ, QQQJ has disappointed since its October 2020 launch. Over the last three years, it's been the second-worst-performing mid-cap ETF on the market.
- QQQJ still trades at an expensive 26.26x forward earnings, one of the highest in its category, and offers less earnings growth than large-cap stocks.
- Instead, investors might find factor ETFs more appropriate. The results of 69 mid-cap funds are presented below, and it's evident quality- and value-oriented strategies are superior.
- Given the large number of alternatives, relatively weak fundamentals, and disappointing returns, I rate QQQJ as a "sell".