Invesco QQQ Portfolio Plus Index
Providing access to today’s most innovative companies
Invesco QQQ
Equity exposure focused on innovation via Invesco QQQ, an Exchange-traded fund (ETF) Designed to track the Nasdaq-100 Index®
Diversifying Bond Exposure
A dynamic bond strategy is utilized to diversify equity exposure while responding to varying interest rate conditions
Commodity Alpha Component
Seeks to capture diversified commodity carry as another potential source of return1
Adaptive asset allocation
Exposure to equities, bonds and commodities adjusted daily to help deliver strong risk-adjusted returns over time
About Invesco QQQ Portfolio Plus Index
Invesco QQQ Portfolio Plus Index seeks strong risk adjusted returns while maintaining 12% volatility target, utilizing an adaptive allocation focusing on the innovation-based Invesco QQQ strategy and a responsive volatility management methodology.
How it works
The centerpiece of the Invesco QQQ Portfolio Plus 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 access to this fast-growing sector.
The Invesco QQQ Portfolio Plus Index provides exposure to bonds as an additional and complementary source of returns. An attractive feature of bonds – and, in particular, US Treasury bonds – is that they often experience less dramatic swings in returns relative to stocks.2 The index incorporates two US Treasury bond components, one focused on 5-year bonds and one focused on 10-year bonds, where each component aims to benefit from long-term trends in the respective bond returns. Each bond component’s exposure is capped at 35% (before volatility target-related adjustments) seeking to balance the diversifying benefits of bonds with the return potential of the QQQ component.
In addition to US Treasury bonds, the index utilizes a commodity alpha strategy that seeks to further improve risk-adjusted performance. This component aims to capture the return differential, or alpha, between longer-term (3-month) and shorter-term (front-month) commodity futures. This component is comprised of a diversified mix of commodity types spanning energy and metals. As with US Treasury bond exposure, the commodity alpha component’s aim is to diversify the index’s risk profile by incorporating another potential source of return that also helps maintain the index’s volatility at the 12% target. The initial weight for commodities is set at 30% and is adjusted based on market conditions.
The Index’s exposure to equities, bonds, and commodities is adjusted daily with the aim of delivering a more responsive asset allocation to achieve the target volatility of 12% annually. Traditional indices employing volatility targets that only use daily observations or one data point tend to react slowly to changes in risk regimes, thereby reducing risk too slowly as markets decline and adding risk too slowly when markets recover.
Resources
Factsheet
An overview of the index complete with strategy highlights and performance information
Transcript
Methodology
Rules and guidelines followed to build and maintain the index
Transcript
Brochure
Illustrates key facts and features of the index