Invesco’s QQQ ETF overtakes its junior counterpart. Two traders are discussing


ETF Invesco QQQ has overtaken its new counterpart, ETF Nasdaq Next Gen 100 (QQQJ).

Launched in 1999, the first is a large-cap technology fund that tracks the Nasdaq 100 Index, with companies like Apple, Microsoft, and Amazon. The latter is its junior version launched in 2020, bearing midcap names including Lyft and Zscaler.

QQQ has outperformed QQQJ in the past month, three months, six months, year-to-date, and over the past 12 months.

In an interview with CNBC’s Trading Nation on Monday, Chad Morganlander, senior portfolio manager and co-founder of Washington Crossing Advisors, made his choice from the two funds.

“These two ETFs are very different,” Morganlander said. “We are sticking with the large-cap technology trade.”

In an email to CNBC, Morganlander highlighted the fundamental differences between the two funds. While QQQ has an average market cap of $ 828 billion, QQQJ has an average market capitalization of $ 22 billion.

“The large-cap version has 60% technology, the smaller ‘J’ version has 40% and has a lot more exposure to industry as well as healthcare,” he said Monday.

“Overall, the bigger caps have better quality names that are much more consistent with resilient balance sheets,” he said. “So that’s where we would stay in the second half of this year.”

In the same interview, Oppenheimer’s Ari Wald gave a different point of view.

“I think both ETFs look great,” said the company’s chief technical officer, adding that the high-growth sector of the market extends beyond just large-cap names on the Nasdaq.

Looking at the QQQJ, Wald said “it has more of a flavor of mid-cap growth,” adding that “it provides pro-cyclical exposure without the need for an interest rate hike.”

By zooming in on the chart, he gave a technical perspective on QQQJ.

“It reverses its downward trend from February to May,” Wald said. “I think there is support at $ 33.50. That’s the 50 day average. As long as you’re above, I think this ETF is set for a big breakout… above its February peak at $ 35. “

QQQJ closed its trade unchanged at $ 34.01 on Monday.



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