About Invesco QQQ Growth Index
Innovation-oriented equity exposure via Invesco QQQ. Bond exposure that responds to changes in market conditions. Daily, adaptive allocations seek to mitigate wild swings in the market. All delivered in a single, comprehensive package.
How it works
The centerpiece of the Invesco QQQ Growth Index is the Invesco QQQ exchange traded fund (ETF). The fund is designed to track the Nasdaq-100 Index®. Invesco QQQ is committed to innovation, offering investors acess to this fast-growing sector.
Responsive Bond Exposure
The Invesco QQQ Growth Index provides exposure to bonds as an additional and complementary source of returns. Another attractive feature of bonds – and, in particular, US Treasury bonds – is that they often experience less dramatic swings in returns relative to stocks.¹
However, a drop in price coupled with higher volatility in 10-year Treasuries often signals a rise in interest rates. When this happens, the Index allocates a portion of the bond exposure away from 10-year Treasuries and into 2-year treasuries, potentially offering more price stability under these conditions. The goal is to provide more defensive exposure and help cushion the impact of declining bond prices.
Adaptive Asset Allocation
The Index’s exposure to equities, bond, and cash is adjusted daily using Salt Financial’s truVol® technology, with the aim to deliver a smoother performance profile over time.
For instance, when the riskiness of stock holdings rises, the Index will shift away from stocks and into bonds, into cash or into a combination of bonds and cash.
On the other hand, as the riskiness of stock holdings decreases, the Index will shift away from bonds or cash and into stocks.
Additionally, as the riskiness of the combined allocation of stocks and bonds rises and falls, the Index allocates more and less, respectively, to cash.
In periods of high volatility, it may be possible for the index to be comprised heavily or fully of bonds and / or cash, which may persist as volatility is elevated. Due to excess return index construction, cash allocations in the index are non-remunerated.
1. For the 10-year period May 31, 2013, to May 31, 2024, the annualized volatility of the S&P 500 Index and Merrill Lynch 10- Year U.S. Treasury Futures Index were 15.29% and 5.26%, respectively. Volatility is the standard deviation. Over the same time period, the correlation between these two indexes was -16.02%. Correlation is a statistic that measures the degree to which two sets of data move in relation to each other. A correlation of +100% means as one set of data moves, either up or down, the other set moves the same, and in the same direction. A correlation of -100% means that the data move in exactly opposite directions. Past performance does not guarantee future results. An investment cannot be made into an index.
Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions. There can be no assurance that actual results will not differ materially from expectations. Diversification/Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns and does not assure a profit or protect against loss. In general, equity values fluctuate, sometimes widely, in response to activities specific to the company as well as general market, economic and political conditions. Investments focused in a particular sector, such as technology, are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments. There is no assurance that the index discussed in this material will achieve their investment objectives. Holding cash or cash equivalents may negatively affect performance.
Although bonds generally present less short-term risk and volatility than stocks, the bond market is volatile and investing in bonds involves interest rate risk; as interest rates rise, bond prices usually fall, and vice versa. Bonds also entail issuer and counterparty credit risk, and the risk of default. Additionally, bonds generally involve greater inflation risk than stocks.
This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional before making any investment decisions.