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QQQ ETF Has Returned 19% In the Last Decade

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The world is changing very fast, and innovative companies are leading the way. It’s a good time to invest in tech companies that are poised to disrupt multiple verticals. Nasdaq 100 is an index that makes up the 100 largest innovative technological companies. It is a favorite index for investors around the world. Invesco QQQ ETF tracks the Nasdaq index.

What Is the Invesco QQQ ETF?

To invest in these 100 stocks, you can invest individually or through an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index. Investing in an ETF is a simple way to gain exposure to these stocks.  

The QQQ ETF constitutes the 100 largest non-financial companies listed on the Nasdaq 100. The stocks on this ETF are rebalanced quarterly and reconstituted annually.

Related article: ETFs: It’s the Ideal Vehicle for Long-Term Investors

QQQ ETF Top Holdings

The areas of the companies that form this ETF are information technology, communication services, consumer discretionary, health care, consumer staples, industrial and utilities.

 As per 26th March 2021, the top 10 QQQ ETF holdings include Apple, Microsoft, Amazon.com, Tesla, Facebook, Alphabet, NVIDIA Corp, PayPal, Intel Corp. Apple forms the largest percentage allocation of QQQ at 10.99%.

Performance

Invesco QQQ ETF is one of the largest and popular large-cap funds. As per a review by Lipper, they rated it as the best large cap fund in terms of total returns over the last 15 years. The fund beat 327 other funds in this category.  

They also placed the fund second in terms of liquidity by the end of 2020. The rank was determined by the average daily trading volume.    

As of 28th February, the QQQ ETF’s 10-year returns were 19.69% while the ETF’s benchmark was 19.94%.

To understand the return in terms of investment, if you had invested $10,000 on this ETF on 31 December 2010, your investment would have grown to $63,803 on December 31, 2021.

Benefits of QQQ ETF

  • It is a good option for investors who have a bullish outlook. Past data have shown that the QQQ stock price increases more than S&P 500 during a bull run.
  • QQQ stock holdings constitute companies that are developing eco-friendly technologies. Hence, the index has long-term growth potential.
  • It is a highly liquid ETF and traders can buy and sell units of the ETF at low cost.
  • The expense ratio of the ETF is extremely low at 0.20%. A low expense ratio helps to increase fund returns as expenses compound.

Invesco QQQ ETF can be a good investment option for individuals who want to invest in the top technological companies.


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