Invesco Adds Small-Cap ETF to QQQ Innovation Suite

Invesco today expanded the Invesco QQQ Innovation Suite with the launch of a new ETF.

The Invesco NASDAQ Future Gen 200 ETF (QQQS) will access smaller-cap companies screened by a key marker of innovation – high-quality patents. 

QQQS will add an efficient overlay to small-cap and micro-cap companies listed on The Nasdaq Stock Market that are not included in the Nasdaq 100 Index or Nasdaq Next Generation 100 Index. High-quality and high value patents may indicate future innovation potential in a smaller-cap company, according to a statement from the firm.

The other funds in the Invesco QQQ Innovation Suite include the Invesco QQQ Trust (QQQ), the Invesco NASDAQ 100 ETF (QQQM), the Invesco ESG NASDAQ 100 ETF (QQMG), the Invesco NASDAQ Next Gen 100 ETF (QQQJ), and the Invesco ESG NASDAQ Next Gen 100 ETF (QQJG).

“With QQQ and QQQJ, Invesco has garnered attention from advisors and investors eager to gain diversified exposure to fast-growing companies across multiple sectors,” Todd Rosenbluth, head of research at VettaFi, said. “It is great to see a new offering focused on more up-and-coming smaller companies to round out portfolios.”

QQQS will track the Nasdaq Innovators Completion Cap Index, an intelligent, equal weighted index that uses a patent data screen created by IPR Strategies, Invesco said in a statement.  

IPR Strategies, a leader in the science of patent valuation, believes that high quality and high value patents represent a future asset and are an early indicator of future positive value. IPR Strategies works with Nasdaq to assign a realistic value to patents based on multiple parameters, including a high commitment to research and development and valuable intellectual property, to source small-cap and micro-cap companies that may be laying the groundwork to become the next industry giants. Given its long-standing expertise in smart beta, Invesco believes that the addition of a thoughtfully composed layer of criteria (patent value) to an overall capitalization screen (small and micro-cap) may be successful in identifying companies with a focus on innovation in their industries, Invesco said in a statement.

“Companies included in the Invesco QQQ Innovation Suite have always spent considerably more on research and development, and Invesco wanted to capture that same commitment to innovation on a smaller cap-tier,” John Hoffman, Americas Head of ETFs and Index Strategies, Invesco, said in a statement. “By applying a high quality patent screen, the QQQS portfolio will focus on smaller-cap companies with a competitive advantage on certain inventions. This will allow investors to customize their market capitalization exposure to companies who are pioneering the future.”

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