WEBs Defined Volatility QQQ ETF (DVQQ)

Overview

The WEBs Defined Volatility QQQ ETF (QVQQ) is designed to provide investors with exposure to the Nasdaq-100 Index while targeting a specific level of volatility. It utilizes a strategy of dynamically adjusting its exposure to the Invesco QQQ Trust and cash in an attempt to maintain a consistent volatility profile. Its primary focus is capital preservation and participation in QQQ upside with managed risk. The investment strategy is based on quantitative analysis of market volatility.

Reputation and Reliability

REX Shares is a relatively new issuer specializing in alternative ETFs, with a growing reputation in the defined outcome and volatility space. While newer than established players, they are known for innovative and complex ETF products.

Management Expertise

The management team at REX Shares consists of professionals with experience in portfolio management, quantitative analysis, and ETF structuring. They have demonstrated expertise in designing and managing complex investment strategies, especially in the defined volatility space.

Goal

The primary goal of QVQQ is to provide investment results that correspond to the performance of the Nasdaq-100 Index, while targeting a defined level of volatility (around 12%).

Investment Approach and Strategy

Strategy: QVQQ does not track a specific index directly. It employs a dynamic strategy that adjusts its exposure to the Invesco QQQ Trust (QQQ) and cash based on market volatility. The strategy aims to reduce exposure to QQQ during periods of high volatility and increase exposure during periods of low volatility.

Composition The ETF holds positions primarily in the Invesco QQQ Trust (QQQ) and cash. The allocation between these two assets is adjusted dynamically based on a quantitative model assessing market volatility.

Market Share: QVQQ holds a small market share within the defined outcome and volatility ETF category.

Total Net Assets (AUM): 66680000

Key Competitors

• Invesco QQQ Trust (QQQ)
• Simplify US Equity PLUS Convexity ETF (SPCX)

Competitive Landscape

The competitive landscape includes broad market ETFs like QQQ and other specialized volatility and defined outcome ETFs. QVQQ's advantage lies in its defined volatility target, appealing to investors seeking downside protection. A disadvantage is its complexity, which may deter some investors, and its underperformance relative to a bull market.

Historical Performance: Historical performance data is not directly available without specific dates. Check financial data providers for this.

Benchmark Comparison: QVQQ's performance is compared to QQQ and a volatility index. It aims to provide similar returns to QQQ with lower volatility, but typically underperforms QQQ in strong bull markets.

Expense Ratio: 0.59

Average Trading Volume

The average trading volume of QVQQ is moderate, suggesting reasonable liquidity for typical investors.

Bid-Ask Spread

The bid-ask spread for QVQQ is typically small, indicating relatively low transaction costs.

Market Environment Factors

QVQQ's performance is highly influenced by market volatility, interest rates, and the performance of the Nasdaq-100. Economic uncertainty and market corrections tend to favor QVQQ due to its volatility dampening mechanism.

Growth Trajectory

QVQQ's growth depends on investor demand for defined volatility strategies and its ability to effectively manage risk. Changes to its model or holdings are not publicly disclosed frequently, but could occur to maintain its volatility target.

Competitive Edge

QVQQ's competitive edge lies in its defined volatility strategy, offering investors a way to participate in the Nasdaq-100's upside while managing downside risk. Its dynamic allocation to QQQ and cash aims to provide a smoother return profile. This strategy differentiates it from simple market-cap weighted ETFs like QQQ. Investors seeking reduced volatility within the Nasdaq-100 may find QVQQ attractive.

Volatility

QVQQ is designed to have lower volatility than the Nasdaq-100. Its historical volatility should be lower than QQQ's.

Market Risk

QVQQ is subject to market risk related to the Nasdaq-100, but its volatility management strategy aims to mitigate some of this risk. It also carries model risk, as the effectiveness of its volatility targeting depends on the accuracy of its quantitative model.

Ideal Investor Profile

The ideal investor for QVQQ is one who wants exposure to the Nasdaq-100 but is concerned about market volatility and potential downside risk. It's suitable for investors seeking a smoother investment experience.

Market Risk

QVQQ is best suited for long-term investors who are looking for a core holding with managed volatility, not for active traders seeking short-term gains.

The WEBs Defined Volatility QQQ ETF (QVQQ) offers investors exposure to the Nasdaq-100 with a focus on managing volatility. It dynamically adjusts its allocation between QQQ and cash to achieve a target volatility level. This strategy aims to provide smoother returns and downside protection compared to a simple market-cap weighted approach. While it may underperform in strong bull markets, it can be attractive to risk-averse investors. Overall, QVQQ can be a valuable addition to a portfolio seeking managed exposure to the tech-heavy Nasdaq-100.

Data Sources:

• REX Shares Website
• ETF.com
• Bloomberg
• Morningstar

Disclaimers:

The data and analysis provided are for informational purposes only and do not constitute investment advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. Market conditions and investment strategies can change.