The lifespan of 15 millennials no longer makes sense for QQQ’s fate


(Bloomberg) – The longevity of one of the world’s largest exchange-traded funds no longer depends on a bunch of millennials.

The $ 138 billion Invesco QQQ Trust Series 1 ticker QQQ changed its rules last week to indicate that the fund‘s expiration date will now be linked to “maturity, redemption, the sale or any other disposition ”of its last title. Previously, the ETF would expire on either March 4, 2124, or 20 years after the death of the 15 people born between 1986 and 1996 who were named in the trust agreement, according to its prospectus.

Tying QQQ’s termination date to its underlying assets effectively extends the life of the fund for a “theoretically infinite” term, said Jeffrey Ptak, global director of manager research for Morningstar Inc.

A spokeswoman for Invesco declined to comment.

The oddity probably comes down to the fact that QQQ was established in 1999 as a mutual fund, which required a specified termination date. The world’s largest ETF, the SPDR S&P 500 ETF Trust, was also launched as ITU in 1993 and is linked to the fate of 11 people born between 1990 and 1993.

While UITs have some perks, such as not having to pay a board fee, most of them have been scrapped as the ETF world becomes more complex, according to Bloomberg Intelligence.

“ITUs were scrapped fairly quickly in favor of the public management company, as they could be managed and do things like use derivatives or engage in securities lending,” said Eric Balchunas, ETF analyst for BI .

QQQ grew by around 35% in 2020 and is poised to experience its best influx year in two decades.


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