Invesco QQQ
The Invesco QQQ Trust is a prominent exchange traded fund that tracks the Nasdaq-100 Index, offering investors exposure to 100 of the largest non-financial companies listed on the Nasdaq Stock Market. Since its inception in 1999, QQQ has become one of the most established and actively traded ETFs in the world that provides investors big rewards during bull markets, potential for long-term growth, lots of liquidity, and low fees. QQQ provides exposure to companies at the forefront of innovation across a diverse range of sectors, all in one investment. The fund’s holdings are predominantly concentrated in the technology sector, with additional exposure to consumer discretionary and healthcare sectors. The ETF's top holdings, which constitute a significant portion of its portfolio, include Microsoft, Apple Inc., Amazon, Alphabet, Tesla, and Meta Platforms. The fund and index are rebalanced quarterly and reconstituted annually.
ABOUT INVESCO QQQ
Invesco QQQ tracks a modified-market-cap-weighted index of 100 NASDAQ-listed stocks. It is one of a few ETFs structured as a unit investment trust.
QQQ charges an annual fee of 0.20%, equating to $20 per $10,000 invested. As of April 17, 2025, QQQ offers a dividend yield of 0.67%, with a trailing twelve-month dividend of $2.99 per share.
Sector allocation as of June 2024: Information Technology (58.94%); Consumer Discretionary (17.90%); Healthcare (6.29%); Industrials (4.64%); Telecommunications (4.41%); Consumer Staples (3.87%); Basic Materials (1.94%); Utilities (1.24%); Energy (0.50%); and Real Estate (0.29%).
Like the Nasdaq 100, QQQ holdings are heavily weighted toward large-cap technology companies. The fund has over $299 billion of AUM as of April 30, 2025.
QQQ PROS
Gives investors access to companies driving innovation and digital transformation with investments in Apple, Microsoft, NVIDIA, Amazon, and Alphabet.
Strong historical performance.
Has consistently delivered long-term capital appreciation with a 10-year average return: ~18.28% (as of 2024), outperforming the S&P 500 over the same period.
Liquidity and Volume.
One of the most heavily traded ETFs in the U.S. with tight bid/ask spreads making it cost-effective for frequent trading or intraday strategies.
Diversification within Nasdaq 100.
While tech-heavy, QQQ includes companies from consumer discretionary, healthcare, and communication sectors.
QQQ CONS
Heavy tech concentration.
Over 58% of the fund is invested in technology-related stocks, making it highly susceptible to sector-specific risks.
Higher volatility.
Sharp downturns in the tech sector can heavily affect QQQ's performance, making it more volatile than the overall market.
More expensive than some tech-focused ETFs.
While competitive, some ETFs like Vanguard’s VGT offer similar exposure with a slightly lower expense ratio (0.10% for VGT vs. 0.20% for QQQ).