The QQQ is an Exchange Traded Fund (ETF) index that includes 100 of the largest international and domestic companies listed on the Nasdaq stock exchange, just like the Nasdaq 100 Index that it tracks.
The QQQ excludes financial institutions and as such, the stock holdings are heavily weighted toward large-cap technology companies. One can refer to the Nasdaq100 site to see the current 100 stocks contained in this index
The Invesco QQQ ETF was previously known as the PowerShares QQQ Trust ETF. It is also informally called the “triple-Qs” or the “cubes.” The QQQ ETF is often viewed as a snapshot of how the technology sector is trading.
As of Friday 6 November, 2020, the QQQ is priced at $US294.61
What Sectors are covered by the QQQ?
The Invesco QQQ ETF tracks many different sectors. They include the information technology (IT), communications services, consumer discretionary, healthcare, consumer staples, industrials, and utility sectors. The QQQ is rebalanced quarterly and reconstituted annually.
The sector breakdown of the Invesco QQQ ETF as of Sept. 30, 2020, is as follows:
- Information Technology 48.21%
- Communications Services 19.14%
- Consumer Discretionary 18.93%
- Healthcare 6.67%
- Consumer Staples 4.67%
- Industrials 1.76%
- Utilities 0.61%
Top 10 Holdings in the QQQ
The top 10 stocks in the Invesco QQQ ETF made up approximately 56% of all QQQ holdings as of Sept. 30, 2020. They are as follows:
- Apple (AAPL) 13.39%
- Microsoft (MSFT) 10.76%
- Amazon (AMZN) 10.66%
- Facebook A Shares (FB) 4.26%
- Tesla Motors (TSLA) 3.45%
- Alphabet A Shares (GOOGL) 3.42%
- Alphabet C Shares (GOOG) 3.31%
- NVIDIA (NVDA) 2.88%
- Adobe Systems (ADBE) 2.03%
- Paypal (PYPL) 1.99%
What are the QQQ Pros and Cons?
As always, when considering a new investment, there are specific strengths and weaknesses that investors need to consider before putting it in their portfolios. The following is a summary of pros and cons
- Big bull market rewards
- Long-term growth potential
- High Liquidity
- Low expenses
- High bear market risk
- Sector risk
- High valuation levels
- No small-cap stocks
QQQ Performance as at September 30, 2020
A summary of performance for QQQ as of 30 September 2020 follows:
- 1 year 48.39%
- 5 Year 23.38%
- 10 Year 20.16%
- Inception 8.86%
Your PROFITABLE ACTION STEPS this time around:
- Continue to expand your knowledge regarding potential great investments. For more information on the Invesco QQQ Trust, refer to the 30 September, 2020 update. Always seek advice from a qualified financial planner before making any significant investments.
- Check out my recent article on the Guru Investor, Jim Simons
- If you haven’t already, go to my home page and download my Passive Income Guide. It describes a number of ways to earn income with minimal ongoing effort (in most cases) and it’s ABSOLUTELY FREE.
Stay safe, healthy and wise and most importantly of all, take ACTION.