ETF Education Report: Invesco Nasdaq Free Cash Flow Achievers ETF (QOWZ)

What this ETF is trying to do

The Invesco Nasdaq Free Cash Flow Achievers ETF (ticker: QOWZ) is an exchange-traded fund. While the specific strategy isn't detailed in the data, it holds a variety of companies. Based on its Top Holdings, the fund has significant exposure to large technology and service companies.

Top Holdings:

• NVIDIA CORP (10.21%)

• BROADCOM INC (5.83%)

• MASTERCARD INC CLASS A (4.80%)

• SALESFORCE INC (3.78%)

• KLA CORP (3.31%)

• AUTOMATIC DATA PROCESSING INC (2.92%)

• SERVICENOW INC (2.92%)

• FORTINET INC (2.91%)

• ADOBE INC (2.54%)

• VEEVA SYSTEMS INC CLASS A (2.48%)

*Note: This is a partial list of the 52 total holdings. Holdings can change over time.*

What the numbers show

When looking at how an ETF performs, it is important to distinguish between price return and total return. Price return only tracks the change in the share price. Total return includes both the share price change and any distributions (cash payments) received.

• Year-to-Date (YTD): The YTD price return is approximately 4.28%. When including distributions, the YTD total return is approximately 4.50%.

• One-Year Performance: The one-year price return is approximately 1.41%. The one-year total return is approximately 1.67%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was $36.84, compared to the current price of $37.35.

Income and distribution explanation

This ETF provides cash distributions to investors. The current distribution yield is approximately 0.24%. This number describes the cash payments relative to the ETF's price. The fund usually pays out quarterly, with 4 payments recorded over the last 12 months.

It is important to remember that a distribution yield is not the same as total return. While distributions provide cash, they do not guarantee that your original investment will stay the same value.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price can sometimes look like erosion, they are not always the same thing.

For QOWZ, the erosion-risk score is 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• Stable Risk Profile: The erosion-risk measurements suggest the fund has been relatively stable.

• Positive Returns: Both price returns and total returns have been positive for the year-to-date and one-year periods.

Cons

• Lower Income Grade: The fund has an income rating grade of "D," suggesting it is not primarily focused on high cash payouts.

• Limited Total Return: The one-year total return of 1.67% is relatively low.

Beginner takeaway

When studying an ETF like QOWZ, remember that price movement and cash distributions are two different things. Always look at the total return to see how the fund performed overall, including the cash it paid out. Additionally, while this fund shows a stable erosion-risk score, high yields in other funds can sometimes be misleading if the share price is falling at the same time.