5 min readBy Beqa Bumbeishvili ETF Insider
How does the QJUN ETF work?
The QJUN ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The issuer of the QJUN ETF is Invesco Capital Management LLC (Invesco). The Invesco QJUN ETF primarily invests in Flexible Exchange Options (FLEX Options) linked to the performance of the Invesco QQQ TrustSM, Series 1 (the Underlying ETF). FLEX Options are customizable equity or index option contracts, allowing investors to tailor key contract terms such as exercise prices, styles, and expiration dates.
The Quadratic Interest Rate Volatility and Inflation Hedge ETF (QJUN) takes a unique approach to addressing interest rate volatility and inflation concerns, and its dividend distribution aligns with its investment strategy. QJUN's dividends are influenced by changes in interest rates and inflation expectations, providing investors with a potential hedge against these economic factors. Investors can expect periodic dividend distributions, and the fund's policies are designed to capture opportunities arising from interest rate movements, making QJUN an intriguing choice for those seeking a strategic approach to income generation in a changing economic environment.
Tracking the Invesco QQQ TrustSM, Series 1 is the primary objective of the QJUN ETF. Under normal market conditions, the fund invests substantially all of its assets in Flexible Exchange® Options (FLEX Options) that reference the price performance of the Invesco QQQ TrustSM. FLEX Options are customized equity or index option contracts traded on an exchange, providing investors with the ability to customize key contract terms. The Invesco QQQ TrustSM is an exchange-traded unit investment trust that uses a full replication strategy, investing in all of the stocks in the Nasdaq-100 Index®, which includes 100 of the largest domestic and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization. QJUN employs FLEX Options to implement a target outcome strategy designed to offer investors a buffer against the first 10% of Underlying ETF losses while capping potential gains at 20.53% (before fees and expenses) during the Target Outcome Period. The fund's ability to customize options contracts allows it to track the Invesco QQQ TrustSM closely and provide investors with tailored risk-return profiles.
The correlation aspect of the QJUN ETF, which primarily invests in Flexible Exchange Options (FLEX Options) referencing the Invesco QQQ Trust, is an essential factor for investors to consider. Since QJUN's performance is linked to the Nasdaq-100 Index through its investment in FLEX Options, its correlation with the index is expected to be strong.
The QJUN ETF primarily focuses on providing investors with a unique target outcome strategy based on the performance of the Invesco QQQ TrustSM, Series 1 (the Underlying ETF). Approximately half of the QJUN ETF's assets are invested in FLEX Options referencing the Underlying ETF, allowing investors to customize key contract terms like exercise prices, styles, and expiration dates. The Invesco QQQ TrustSM itself follows a full replication strategy, investing in all the stocks within the Nasdaq-100 Index®, with a significant concentration in information technology companies.
The exposure characteristic of the Innovator NASDAQ-100 Power Buffer ETF (QJUN) revolves around its strategy of providing investors with a target outcome linked to the performance of the Invesco QQQ Trust, tracking the Nasdaq-100 Index. The ETF employs FLEX Options to offer a buffer against the first 10% of Underlying ETF losses while capping the potential upside return. This approach allows investors to seek specific risk-reward outcomes within the Nasdaq-100 Index, making QJUN a unique tool for those interested in Nasdaq-100 exposure with tailored risk management.
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5 min readThe QJUN ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
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