Why Invesco Stock Is Soaring After Proposing This Change to Popular QQQ ETF

Invesco (IVZ) shares surged Friday after the investment manager said it’s looking to change the structure of its popular Invesco QQQ Trust (QQQ) exchange-traded fund tracking the Nasdaq 100 Index, in a move that could make it more profitable for Invesco.

Shares of Invesco jumped over 15% to lead the day’s gainers on the S&P 500. The stock has added close to one-quarter of its value over the past 12 months.

Invesco said Friday it’s seeking shareholder approval to shift the QQQ’s structure from the unit investment trust (UIT) it has had since its creation in 1999, to an “open-end fund” ETF structure used by many ETFs that have been created since. The move would allow Invesco to generate revenue and potential profits from the ETF; in its current structure, Invesco is only allowed to be reimbursed for marketing expenses.

QQQ shareholders will be able to vote on the proposal at a special meeting on Oct. 24, along with the election of nine members of a newly created board of trustees, and an agreement that would make Invesco the investment advisor to the fund.

Invesco said the changes would give the ETF’s investors “greater operational flexibility, greater regulatory certainty, the ability to engage in securities lending,” along with a lower expense ratio.

Bloomberg estimated that with roughly $355 billion in assets under management and a 0.2% expense ratio, the ETF generates north of $700 million annually, giving Invesco a significant new stream of revenue if shareholders approve the shift.

This article has been updated since it was first published to reflect more recent share price values.