Invesco Is S&P 500’s Best Stock Friday. It Hopes to Start Making Money From QQQ.

The company filed a statement with the SEC to change the structure of its flagship QQQ ETF. (Michael Nagle/Bloomberg)

Invesco was the top-performing stock in the Friday after the investment management company pushed to finally make a profit from its flagship exchange-traded fund.

Invesco filed a proxy statement with the Securities and Exchange Commission on Thursday requesting permission from owners of the QQQ Trust Series 1 to convert the ETF from a “unit investment trust,” or UIT, to a “open-end fund.” The obscure regulatory move would allow Invesco to earn revenue and potential profits from ETF, the company said in the SEC filing, something it can’t do today.

Invesco stock was surging 12% on Friday, putting it on pace for its highest close since Feb. 7, 2023.

With $353 billion in assets under management, QQQ is the fifth-largest ETF on the market, according to VettaFi. But Invesco’s ability to make money from its core offering is limited.

Under the current structure, the company can be reimbursed for marketing the fund, but it’s prohibited from serving as the fund’s investment advisor. Invesco’s proposal would change that, making the company responsible for the fund’s marketing expenses, but also allowing it to claim the investment fees it now misses out on, Invesco explained.

Why would QQQ shareholders agree to the change? For one, their expense ratio would decline from 0.2% to 0.18% if the proposal passes, Invesco said. The company also argued the fund, which it launched in 1999, would benefit from greater flexibility and regulatory certainty at a time when most ETFs operate as open-end funds.

Shareholders of the trust will vote on the proposal at a special meeting scheduled for Oct. 24.

Write to Nate Wolf at nate.wolf@barrons.com