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Yahoo
7 days ago
- Business
- Yahoo
Why Invesco Wants QQQ to Become an Open-End Fund
Invesco QQQ Trust is one of the most profitable ETFs on the market today. Not so much for Invesco. The firm filed Thursday with the Securities and Exchange Commission to change QQQ from a 'unit investment trust' — a structure unique to it and a handful of other long-standing ETFs — to an open-end fund. The change would enable Invesco to earn more revenue from the $355 billion fund and give it authority over spending, roughly a quarter of which has gone toward marketing. If the request is approved, both Invesco and shareholders could see a long overdue windfall, increasing shareholders' earnings by up to $70 million, according to Morningstar analyst Bryan Armour. The change is also expected to bring down the expense ratio for one of the most popular ETFs on the planet. 'Because QQQ has grown to be such a massive ETF… that has really increased that marketing budget, and that's why we see QQQ sponsoring so many different events, and sports, and stadiums, and all sorts of things,' Armour said. 'What this [filing] does is it gives them discretion over how to spend that fee revenue, with the expectation that they would probably keep more of that for themselves.' READ ALSO: Bitcoin with Bubblewrap: Calamos Preps Laddered ETFs and Best International Equity ETFs of 2025 Reve-Q The QQQ saga began when the Nasdaq launched the fund in 1999 as a UIT, an 'an obscure structure' dating to the early 90s, per Bloomberg. In the early 2000s, the index transferred ownership to Powershares, Invesco's owner at the time. If approved, the move would make Invesco QQQ's trustee, replacing its current trustee, BNY Mellon, and making the company the fund's investment adviser. The move would also lower the fund's expense ratio by 2 basis points to 0.18% — money that would go back to QQQ shareholders. The fund itself already earns $711 million in revenue each year, with about $180 million of that going toward marketing. The rest is split between BNY Mellon and the Nasdaq. 'They would still, I'm sure, do marketing, but any cut to that marketing spend would basically be profit,' Armour said. 'The stock price is up almost 15% [on Friday] for Invesco as a result, because that's a considerable increase.' Invesco's QQQ Trust Series 1 fund has $355 billion in assets under management, making it the fifth-highest ETF by assets under management. The current expense ratio is 0.2%. QQQ is currently up 10% year to date YTD as of Friday afternoon. Finally. So, why is Invesco just now hopping on the open-end fund train, given that most of the other ETFs on the market are already classified that way? Armour said the reasons are twofold: to benefit Invesco and to enrich investors. 'It's an opportunity for investors to get a fee reduction, and then also QQQ can do securities lending and dividend reinvestments, which it couldn't do previously in the UIT structure,' he said. 'I think it's a win for Invesco and investors.' This post first appeared on The Daily Upside. To receive exclusive news and analysis of the rapidly evolving ETF landscape, built for advisors and capital allocators, subscribe to our free ETF Upside newsletter.
Globe and Mail
18-07-2025
- Business
- Globe and Mail
Invesco shares reach 2-year high after filing to reclassify $360 billion ETF
Shares of Invesco jumped more than 14 per cent on Friday, hitting their highest level in more than two years after the investment manager filed paperwork to reclassify its popular QQQ exchange-traded fund into a management company. An Invesco subsidiary, Invesco Capital Management, filed paperwork with the Securities and Exchange Commission, seeking permission from QQQ beneficial owners to operate the ETF as a management company, according to a statement on Friday. That subsidiary will be appointed as QQQ's investment adviser should the proposal be approved, and its management fee will fall to 0.18 per cent from 0.20 per cent. Invesco could not be reached for further comment. Invesco's shares rose as high as US$19.87, its highest since February 2023. It is on track for the biggest daily percentage gain since November 2022. Bryan Armour, ETF analyst at Morningstar, told Reuters that the change in QQQ's management structure will allow Invesco to retain more cash for other purposes beyond marketing the fund, as mandated by its prospectus. 'This change would give them the opportunity to keep some of that cash for themselves instead of being obliged to sponsor so many things,' Armour said. With a market capitalization of about US$360 billion, QQQ is one of the largest U.S.-listed ETFs and is also among the most actively traded. It closely tracks the Nasdaq 100 index, which includes some of the biggest technology companies. It is up about 14 per cent year-to-date compared with a nearly 10 per cent gain in the Nasdaq 100 in the same period.
Reuters
18-07-2025
- Business
- Reuters
Invesco shares reach 2-year high after filing to reclassify $360 billion ETF
NEW YORK, July 18 (Reuters) - Shares of Invesco (IVZ.N), opens new tab jumped more than 14% on Friday, hitting their highest level in more than two years after the investment manager filed paperwork to reclassify its popular QQQ exchange-traded fund (QQQ.O), opens new tab into a management company. An Invesco subsidiary, Invesco Capital Management, filed paperwork with the Securities and Exchange Commission, seeking permission from QQQ beneficial owners to operate the ETF as a management company, according to a statement on Friday. That subsidiary will be appointed as QQQ's investment adviser should the proposal be approved, and its management fee will fall to 0.18% from 0.20%. Invesco could not be reached for further comment. Invesco's shares rose as high as $19.87, its highest since February 2023. It is on track for the biggest daily percentage gain since November 2022. Bryan Armour, ETF analyst at Morningstar, told Reuters that the change in QQQ's management structure will allow Invesco to retain more cash for other purposes beyond marketing the fund, as mandated by its prospectus. 'This change would give them the opportunity to keep some of that cash for themselves instead of being obliged to sponsor so many things,' Armour said. With a market capitalization of about $360 billion, QQQ is one of the largest U.S.-listed ETFs and is also among the most actively traded. It closely tracks the Nasdaq 100 index (.NDX), opens new tab, which includes some of the biggest technology companies. It is up about 14% year-to-date compared with a nearly 10% gain in the Nasdaq 100 in the same period.
Yahoo
18-07-2025
- Business
- Yahoo
Defense ETFs Surge Amid Wartime Buildups
War, what is it good for? Well, for one thing, these exchange-traded funds. Defense ETFs are surging this year, boosted by ongoing conflicts in Europe and the Middle East. Many are outperforming the broader market, with some pulling in more than $1 billion in inflows. Sector-specific ETFs are tricky beasts, though. Lacking broad exposure, they can often depend on market timing — a big no-no for advisors. But hey, a broken clock is still right twice a day. 'Security and defense ETFs have been highly successful in 2025,' said Bryan Armour, director of ETF & passive strategies research at Morningstar. 'Geopolitical tensions and European rearmament have driven returns higher.' READ ALSO: Vanguard Made a Single Acquisition. Now, It's Getting Sued and Referrals Are Still King, Even In the Era of AI Take Up Arms Wars and conflict may not be ideal on a human level, but they often become boons for certain sectors and businesses. The war in Ukraine, now in its third year, and increasing fears of Russian aggression have led NATO to boost defense spending targets to 5% of GDP for member nations by 2035. France plans to raise its military budget to $74.8 billion by 2027. As countries rearm, investors are pouring money into funds focused on the businesses behind the buildup. 'These strategies are no longer niche,' said Gavin Filmore, chief revenue officer at Tidal Financial. 'They're being recognized as core allocations amid rising geopolitical tensions and global defense modernization. The flows are reflecting that urgency.' Some of the top funds include: The Global X Defense Tech ETF (SHLD) is the standout defense fund, up more than 60% this year. As of the end of June, it had taken in roughly $1.65 billion in inflows, according to Morningstar Direct. The Themes Transatlantic Defense ETF (NATO) is up more than 40% this year, and took in about $33 million inflows in that time. Stratego. Despite strong returns and investor enthusiasm for defense ETFs, Armour said advisors should always consider the potential drawbacks, such as higher fees and concentration. 'Investing in a defense ETF makes sense based on the geopolitical changes of the past few months,' he told Advisor Upside. 'But that information is already priced in by now, so is it still a good time to buy?' This post first appeared on The Daily Upside. To receive financial advisor news, market insights, and practice management essentials, subscribe to our free Advisor Upside newsletter. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
14-07-2025
- Business
Why is the price of bitcoin hitting a record high? Experts explain.
Bitcoin vaulted to a record high on Monday, climbing more than 1% in early trading and hurtling past $120,000 for the first time. The surge comes as the U.S. House of Representatives stands poised for 'crypto week,' a series of debates over the coming days on legislation that could ease regulatory complexity long viewed as an impediment for the industry. The price of bitcoin clocked in at $120,290, amounting to a nearly 15% surge over the past month as crypto-friendly legislation made its way through Congress and investors displayed growing adoption of a new tool for investment in bitcoin. Ether, the second-largest cryptocurrency, also climbed 1% on Monday. Solana, another popular cryptocurrency, climbed 2%. Analysts who spoke with ABC News attributed the surge to signals of a continued government posture friendly toward crypto as well as the growing adoption of a new tool for investment in bitcoin. The rise in price also owes to a steadily approaching limit in the supply of bitcoin, which means heightened demand has outpaced the release of new bitcoins, some analysts previously told ABC News. Some observers question the role of bitcoin's limited supply, since they believe the long-known feature of bitcoin's architecture has already been factored into the asset's price. The House is set to take up the GENIUS Act, an industry-backed measure establishing rules targeting stablecoins, which are a type of cryptocurrency pegged to the value of another asset, often the U.S. dollar. Supporters of the GENIUS Act applaud the measure as a first-of-its-kind effort to formalize a key segment of the cryptocurrency industry, offering safeguards for consumers, allowing entry for conventional financial firms and growing the digital currency market. Critics of the measure, however, say it amounts to an industry-friendly set of weak regulations that fail to adequately protect consumers and police illicit trading of stablecoins. Members of the House will also debate a measure that could clarify the federal government's regulatory posture toward crypto, as well as another bill that would prohibit the Federal Reserve from issuing its own digital asset. Bryan Armour, the director of passive strategies research at financial firm Morningstar, said the policy blitz in the House marks the latest in a string of positive developments for crypto in Washington, D.C., since President Donald Trump's election victory in November. Since the presidential election, the price of bitcoin has soared nearly 80%. 'Crypto week,' Armour said, foretells the 'continuation of broader crypto policy' under the Trump administration. Trump's business dealings in cryptocurrency have raised concerns among some observers about a potential conflict of interest. In March, Trump-backed crypto firm World Liberty Financial issued a stablecoin USD1. An Abu Dahbi-based investment firm last month used the stablecoin to make a $2 billion investment in crypto exchange Binance, putting Trump's company in a position to profit from the deal. Trump has denied any wrongdoing. Trump has yet to release his financial disclosures as president, so it's unclear what arrangements he has made to ensure a firewall between his personal businesses and his presidency. A White House spokesperson told Reuters in April that "President Trump's assets are in a trust managed by his children. There are no conflicts of interest." Crypto gains over recent months have also been propelled in part by U.S. approval last year of Bitcoin ETFs, or Exchange-Traded Funds. Bitcoin ETFs allow investors to buy into an asset that tracks the price movement of bitcoin, while avoiding the inconvenience and risk of purchasing the crypto coin itself. Top investment firms like Fidelity and Franklin Templeton offer bitcoin ETFs, making it easier for investors to pour funds into the world's largest cryptocurrency. As demand has grown, analysts said, the price of bitcoin has climbed. A rush of investment into Bitcoin ETFs in recent days sent the combined asset value of such investment vehicles to a record high of more than $158 billion, according to The Block, an outlet that covers digital assets. Investors placed more than a billion dollars into Bitcoin ETFs on consecutive days last week, The Block found. 'Since the U.S. approval of bitcoin ETFs, we've seen institutional adoption of bitcoin,' Nikhil Bhatia, a professor of finance and business economics at the University of Southern California who studies cryptocurrency, told ABC News. The run-up to bitcoin ETF approval in fall 2023, Bhatia added, was when bitcoin 'got back into bull market mode.' While policy conditions and new investment tools bode well for bitcoin, the precise reasons for the recent surge remain difficult to pin down, some analysts told ABC News. Digital currencies lack an underlying value beyond the price set by the ebb and flow of investor demand, contrasting the assets with stock prices determined in part by expectations of future profits, Bryan Routledge, a professor of finance at Carnegie Mellon University's Tepper School of Business, told ABC News. 'Bitcoin prices have always been puzzling in a sense,' Routledge added. 'It begs the question: 'Why now?' I don't know what the new information is.'
