Invesco's stock suffered a roughly 5% decline on Monday after BlackRock filed paperwork with the Securities and Exchange Commission to create an exchange-traded fund that would follow the Nasdaq-100 index.
The proposed ETF from BlackRock's iShares lineup is slated to trade under the ticker IQQ, according to the filing. The filing did not specify the fees that the new iShares fund would charge.
If launched, the iShares Nasdaq-100 ETF would enter into direct competition with the Invesco QQQ Trust ETF. The QQQ Trust is one of the largest ETFs in the world, with approximately $376 billion in assets under management, based on the LSEG data cited in the filing.
The QQQ Trust has long been a widely traded vehicle for investors seeking exposure to large-cap growth and technology names listed on Nasdaq. Only a small number of ETFs that exclusively track the Nasdaq-100 are publicly available, according to an ETF database referenced in the filing.
The Nasdaq-100 index itself is composed of 100 of the largest non-financial companies listed on the Nasdaq exchange. Examples of index components named in the filing include Nvidia (NASDAQ:NVDA) and Apple (NASDAQ:AAPL).
"Expanding access to the Nasdaq-100 is intended to be additive, supporting investors by improving the efficiency, liquidity, and availability of benchmark-linked exposure across markets and product types," Nasdaq said in a public statement.
Summary
BlackRock's SEC filing for an iShares Nasdaq-100 ETF (ticker IQQ) coincided with a roughly 5% drop in Invesco shares. The filing left fees unspecified and sets up a direct competitor to Invesco's QQQ Trust, which holds about $376 billion and tracks the Nasdaq-100, an index that includes large non-financial Nasdaq companies such as Nvidia and Apple.
Key points
- BlackRock filed to launch an iShares Nasdaq-100 ETF that would trade under the ticker IQQ.
- The filing did not disclose the fee structure for the new fund.
- The new fund would compete with Invesco's QQQ Trust, which manages approximately $376 billion in assets and tracks the Nasdaq-100.
Risks and uncertainties
- Fee details for the proposed iShares Nasdaq-100 ETF remain unspecified, leaving questions about potential pricing competition.
- The entry of a new fund into a market with a dominant incumbent introduces uncertainty for market share and liquidity distribution among Nasdaq-100 ETFs.
- Market reaction to the filing included a near-term decline in Invesco's stock price; further market moves are not detailed in the filing.
Note: This article reports on the SEC filing and market reaction described in the filing and related statements. It does not include additional financial assumptions or projections beyond those contained in the filing and referenced data.