Talk Your Book: Investing in Next Gen Tech Stocks
Episode
25 min
Read time
2 min
Topics
Career Growth, Productivity, Health & Wellness
AI-Generated Summary
Key Takeaways
- ✓QQQJ Composition: QQQJ holds Nasdaq-listed stocks ranked 101–200 by market cap, with zero overlap with QQQ and only 4% overlap with the S&P 500. Morningstar classifies it as mid-cap growth, but holdings skew larger than typical mid-cap indexes like the S&P 400. Roughly five to seven holdings graduate into QQQ annually, making top holdings worth monitoring as potential promotions.
- ✓Sector Differentiation: QQQJ carries approximately 32% technology exposure, roughly half of QQQ's 60% tech weighting. Health care is a standout differentiator, with bioinformatics and biotech patent filings among the highest activity within the fund. Investors seeking Nasdaq exposure with less tech concentration can use QQQJ as a complement to QQQ or broad S&P 500 index funds.
- ✓Market Broadening Signal: As of early February, QQQJ was up nearly 6% year-to-date while QQQ was essentially flat. Invesco's equal-weight S&P 500 fund RSP was simultaneously hitting all-time highs. This divergence signals a measurable rotation away from mega-cap dominance, a trend that had been building for twelve to fifteen months across small-cap, value, and international categories.
- ✓Options Income ETF Structure: Invesco's QQA uses the Nasdaq 100 as its base and layers a covered call and cash-secured put overlay to generate approximately 10% above the index's dividend yield, paid monthly. Schroeder frames this as a response to demographic demand from retirees who need income but also want equity upside, particularly in qualified accounts where yield and gains are taxed identically.
- ✓Active ETF Trajectory: Active ETFs dominated new fund launches in the most recent year and Schroeder views the category as still in early stages. Major asset managers, including Invesco, are converting existing SMA and mutual fund strategies into ETF wrappers. Investors should expect continued expansion in active equity and fixed income ETFs alongside options-based income products over the next several years.
What It Covers
Michael Batnick and Ben Carlson speak with Invesco equity product strategist Paul Schroeder about the Invesco Nasdaq Next Gen 100 ETF (QQQJ), which tracks stocks ranked 101–200 on the Nasdaq. The conversation covers sector composition, market broadening beyond Mega-cap names, options-based income ETFs, and active ETF growth trends.
Key Questions Answered
- •QQQJ Composition: QQQJ holds Nasdaq-listed stocks ranked 101–200 by market cap, with zero overlap with QQQ and only 4% overlap with the S&P 500. Morningstar classifies it as mid-cap growth, but holdings skew larger than typical mid-cap indexes like the S&P 400. Roughly five to seven holdings graduate into QQQ annually, making top holdings worth monitoring as potential promotions.
- •Sector Differentiation: QQQJ carries approximately 32% technology exposure, roughly half of QQQ's 60% tech weighting. Health care is a standout differentiator, with bioinformatics and biotech patent filings among the highest activity within the fund. Investors seeking Nasdaq exposure with less tech concentration can use QQQJ as a complement to QQQ or broad S&P 500 index funds.
- •Market Broadening Signal: As of early February, QQQJ was up nearly 6% year-to-date while QQQ was essentially flat. Invesco's equal-weight S&P 500 fund RSP was simultaneously hitting all-time highs. This divergence signals a measurable rotation away from mega-cap dominance, a trend that had been building for twelve to fifteen months across small-cap, value, and international categories.
- •Options Income ETF Structure: Invesco's QQA uses the Nasdaq 100 as its base and layers a covered call and cash-secured put overlay to generate approximately 10% above the index's dividend yield, paid monthly. Schroeder frames this as a response to demographic demand from retirees who need income but also want equity upside, particularly in qualified accounts where yield and gains are taxed identically.
- •Active ETF Trajectory: Active ETFs dominated new fund launches in the most recent year and Schroeder views the category as still in early stages. Major asset managers, including Invesco, are converting existing SMA and mutual fund strategies into ETF wrappers. Investors should expect continued expansion in active equity and fixed income ETFs alongside options-based income products over the next several years.
Notable Moment
Schroeder reveals that Invesco's momentum ETF SPMO grew from roughly one billion dollars to nine billion dollars in assets within a single period, then flows began rotating back toward equal-weight and quality strategies — illustrating how quickly capital chases recent performance and then reverses.
Episode Transcript
Today's animal spirits talk your book is brought to you by Invesco. Go to invesco.com to learn more about the Invesco Nasdaq Next Gen 100 ETF, ticker QQQJ. That's the Tech Juniors. Is that right, Michael? That's right, Ben. Alright. Invesco.com to learn more. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Badnick and Ben Carlson as they talk about what they they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Brit Holt Wealth Management may maintain positions in the securities discussed in this podcast. Welcome to animal spirits with Michael and Ben. There was a time there, Ben. When was it? Was it '23 when I was, like, apologizing to the audience and to you, I guess, for sorry. We're we're we're doing this talk again. We're we're doing it. We're talking about the Mag seven because that's all there was to talk about. There was one year in particular, I do think it was '23, where the S and P was up whatever it was, and x the Mag, it was basically flat or said differently. The Mag seven was up 20% of the four ninety three were flat. Like, it was it was that stark. And this year, we're recording this intro on February 9. The spread between the equal weight and the cap weighted S and P has never been this large. And I would imagine, although I can't prove it, with a cursory glance, maybe I could, that if you were to equal weight the tech stocks versus tech, it would look similar, said differently. What about the juniors? Today, we're talking to Invesco about the junior queues, the triple q j. Yes. As of today, year to date basis, this is just price only. The next gen, which is the yeah. The triple queues with a j on the end is up almost 6%, and the queues themselves are just about flat on the year. So Okay. There you have it. You're seeing this not on the S and P and the Nasdaq. You're right. It was all, like, the biggest stocks are carrying all the weight. When is this other stuff gonna play catch up? And now we're seeing that happen. And so we on today's show, we talked to Paul Schroeder. Paul is the equity product strategist at Invesco, the QQQ equity product strategist. And they have all these different queues, strategies that they that they talk about. So we talked about some of them today, but we really highlighted these juniors. And so it's you have the Nasdaq 100, which is a 100 biggest, and then this is the next 100. Right? So call it mid cap kinda growth space. And, yeah, it's outperforming this year. So here's our …
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by Invesco
“Invesco's QQA uses the Nasdaq 100 as its base and layers a covered call and cash-secured put overlay to generate approximately 10% above the index's dividend yield, paid monthly.”
- Invesco Momentum ETF (SPMO)By guest
by Invesco
“Schroeder reveals that Invesco's momentum ETF SPMO grew from roughly one billion dollars to nine billion dollars in assets within a single period.”
by Invesco
“Michael Batnick and Ben Carlson speak with Invesco equity product strategist Paul Schroeder about the Invesco Nasdaq Next Gen 100 ETF (QQQJ), which tracks stocks ranked 101–200 on the Nasdaq.”
by Invesco
“Invesco's equal-weight S&P 500 fund RSP was simultaneously hitting all-time highs.”
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