Invesco Plans QQQ Trust Conversion to Open-End Fund

Invesco has proposed converting its flagship Invesco QQQ Trust Series 1 ETF from a unit investment trust (UIT) to an open-end fund structure, seeking shareholder approval to facilitate this change. This restructuring would allow Invesco to collect a management fee of 0.18% on QQQ's $350 billion-plus assets, enabling the company to finally earn revenue and potential profits from the fund, which currently generates fee revenue primarily for BNY Mellon and Nasdaq rather than Invesco. The conversion is expected to reduce the fund's expense ratio slightly from 0.2% to 0.18%, lower marketing expenses, and provide operational benefits such as securities lending and custom redemption baskets. Investors may benefit from potential savings exceeding $70 million, while the company would replace BNY Mellon as trustee and appoint one of its subsidiaries as investment adviser. Despite the positive stock surge following the announcement, analysts maintain a cautious outlook with a consensus 'Hold' rating and some estimates pointing to a possible downside. The conversion represents a significant structural shift of one of the ETF industry's largest and most profitable funds, reflecting Invesco's effort to monetize QQQ more effectively.