Invesco has launched an equally weighted Nasdaq 100 ETF, becoming the first equal weight ETF in Europe focused on the flagship index.
The Invesco NASDAQ-100 Equal Weight UCITS ETF weighs all 100 stocks equally, rather than using market-cap weighting methodology.
Tracking the NASDAQ-100 Equal Weighted index, the ETF will see the stocks reweighted at each quarterly rebalancing date.
Nasdaq 100 to undergo special rebalance to address overconcentration of 'magnificent seven'
While the Nasdaq has grown rapidly in recent years, much of this has been driven by the ‘magnificent seven' of Microsoft, Apple, Nvidia, Tesla, Alphabet, Meta and Amazon, leading them to carry a large weighting in the market-cap index.
Invesco noted that using the methodology sees the information technology sector drop from over half of the Nasdaq to just 35% of the equally weighted index.
Meanwhile, the top ten holdings in the Nasdaq make up 60% of the parent index but just 10% of the equally weighted index.
The ETF has an annual charge of 0.2%.
Gary Buxton, head of EMEA ETFs and indexed strategies at Invesco, said: "Nasdaq has always been about innovation, both in terms of the company itself and the type of companies that choose to list there.
"That commitment to innovation sets them apart and was one of the reasons we started our relationship with Nasdaq almost 25 years ago.
"It is worth noting how the Nasdaq-100 index has evolved during this time, especially at the top end. Huge household names such as Dell and Starbucks have been replaced by the likes of Apple, Tesla and even PepsiCo, not because they fell out of favour but because other innovative companies have simply performed better."
