What is the QQQ ETF?
Invesco QQQ (formerly called Powershares QQQ), also known colloquially as the"triple-Qs" or"cubes", is a broadly traded and held exchange-traded fund (ETF) that tracks the Nasdaq 100 Index. Its focus is on big global and U.S. businesses in the technology, healthcare, industrial, consumer discretionary, and telecommunications businesses.
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- The Invesco QQQ is a popular ETF that tracks the Nasdaq 100 index.
- This technology-heavy indicator is dominated by big tech names such as Apple, Amazon, Google, and Facebook.
- The ETF has an expense ratio of 0.2% and an average daily trading volume of about $15 billion.
The Nasdaq 100 Index
The Nasdaq 100 Index consists of 100 of the biggest global and national firms, excluding financial firms, which are recorded on the Nasdaq stock market, based on marketplace capitalization.1 Hence, QQQ is significantly traded toward large-cap technology firms and is frequently regarded as a photo of the way the technology industry is trading.
The indicator is built on a capitalization methodology. This method employs weights of items in accordance with their market capitalization. Weighting enables constraints to balance the indicator and restrict the effect of the businesses. To achieve this, in the event the distribution requirements aren't met Nasdaq reviews the composition of this index each quarter and correct weightings.
Instead of the Nasdaq 100 index, the QQQ ETF is a security that trades in exchange to invest 100 companies.
QQQQ was the ticker symbol for the Nasdaq 100 Trust, which fell just one' in its own ticker.QQQ Sub-Sectors
The QQQ monitors the data technologies, consumer optional, healthcare, consumer principles, industrials, and telecommunication services industries. QQQ reconstituted and is rebalanced.
As of Dec. 31, 2019, QQQ's business breakdown was
- Information technologies: 47.35%
- Telecommunication services 20.88percent
- Consumer optional: 14.70percent
- Health maintenance: 7.23percent
- Client staples: 5.98percent
- Industrials: 2.68percent
The best 10 holdings of QQQ, as of Dec. 31, 2019, were:
- Apple (AAPL): 11.59percent
- Microsoft (MSFT): 10.69percent
- Amazon.com (AMZN): 8.14percent
- Facebook (FB): 4.39percent
- Enforcement (GOOGL) Class A shares: 4.09percent
- Enforcement (GOOG) Class C shares: 4.08percent
- Intel (INTC): 2.95percent
- Cisco Systems (CSCO): 2.31percent
- Comcast (CMCSA): 2.31percent
- PepsiCo (PEP): 2.17percent
Apple, undoubtedly the most significant business for QQQ investors, now has a market cap of about $1.28 trillion as of Mar. 5, 2020 -- the biggest in history.2 Apple has perfected the craft of getting customers into its ecosystem rather than letting go, by upselling and releasing new versions of older goods so as to keep earnings growing.
Microsoft, Google, and Amazon are highly innovative with powerful usable cash flow. On the main point, which assists investors to feel protected, these holdings provide consistently with the exception of Amazon. Amazon, for its own part, boasts growth that is uncontrolled.
The QQQ ETF comprises 104 holdings as of May 2020.Expenses and Additional Factors
People who are searching for an ETF that accompanies a very low-cost ratio -- only 0.2 percent, as of May 2020, might wish to consider Invesco QQQ.3
The ETF is built as a unit investment trust (UIT). As of May 2020, the QQQ ETF has a market cap of about $100 billion in funds under management. All firms at the Invesco QQQ Trust need to be recorded on the Nasdaq market for two decades and also has to be a part of the Nasdaq 100. Some exceptions have been made for businesses recorded for a single year but have very large market capitalizations. All these stocks have to get an average daily trading volume of 200,000 and need to report earnings both quarterly and yearly. Businesses with insolvency issues are omitted in the QQQ.
The Main Point
QQQ checks a lot of the boxes investors search for in market ETFs. Without burdening the dedication of a ETF or investors with stock-picking the ETF Features cost-efficient vulnerability to some basket of advanced businesses