Invesco has brought the first of its US ‘Income Advantage’ range to Europe with the launch of an active exchange-traded fund focused on Nasdaq 100 technology stocks.
The Invesco Nasdaq-100 Income Advantage UCITS ETF (QQIA) offers 70%-85% passive exposure to the companies on the tech index such as Nivida, Apple and Microsoft, while actively using covered call and puts to pay a monthly dollar dividend and provide some protection from market falls.
Listed on the London Stock Exchange (LSE), Deutsche Börse, Six Swiss Exchange and Euronext Milan, QQIA mirrors the US-listed Invesco QQQ Income Advantage ETF which yields nearly 9%. It has a total expense ratio of 0.29%.
Chris Mellor, head of EMEA ETF equity product management at Invesco, said: “Despite the relatively high monthly income that’s expected to be delivered by this ETF, the structure is intended to produce a total return that should appeal to many long-term investors.”
Our view
David Batchelor, senior analyst at QuotedData, said: “In yet another example of a US active ETF offering coming to Europe, I would expect the new Invesco Nasdaq-100 Income Advantage UCITS ETF launch to be the first of many in the range. The Income Advantage strategy works by providing passive exposure to a benchmark – in this case between 70% and 85% in the Nasdaq-100 – with the balancing capital used to implement covered call and cash-secured put strategies (the “Income Generation Component”). The premia received from the option sales provides recurring cash flow and some downside protection. This shows there are many ways to skin a cat when it comes to active ETFs – although how active a fund with over two-thirds passive exposure really is, is debatable.”
