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ETF Investing

Invesco QQQ ETF

Invesco QQQ is a popular exchange-traded fund (ETF) that is designed to track the Nasdaq-100 Index. Because of this, Invesco QQQ tracks stocks from companies like Google, Microsoft and Apple. In general, Invesco QQQ will have all 100 stocks in the Nasdaq-100 Index.

Within the Nasdaq-100 Index, you will find domestic and international companies. Invesco is reconstituted every year, and it is rebalanced every quarter. For all practical purposes, Invesco’s ETF is essentially an index fund. The main difference between index funds and ETFs is that an ETF’s price can fluctuate throughout the day like a stock, but index funds can be purchased only at the price listed at the end of the trading day.

Originally, Invesco was established as PowerShares Capital Management in 2002. In 2006, PowerShares purchased Invesco because PowerShares wanted to enter the ETF market. As a result of this purchase, the combined company was renamed Invesco PowerShares. The year before, PowerShares had created a microcaps fund for investors.

Invesco QQQ ETF

What Stocks Make Up Invesco QQQ?

Currently, the stocks in Invesco QQQ are made up of Nasdaq’s top 100 stocks. As stock prices change, the actual composition of the fund can vary. According to Invesco, the fund’s top 10 stocks are as follows.

  • Apple: 12.25% of the ETF
  • Microsoft: 9.13% of the ETF
  • Amazon: 8.88% of the ETF
  • Tesla: 4.5% of the ETF
  • Facebook A shares: 3.57% of the ETF
  • Alphabet C shares: 3.14% of the ETF
  • Alphabet A shares: 2.86% of the ETF
  • Nvidia: 2.67% of the ETF
  • PayPal: 2.27% of the ETF
  • Adobe: 1.98% of the ETF

These stocks come from a variety of sectors and geographic regions. Information technology is the largest sector by far, with a 48.1% share. But consumer discretionary accounts for 18.89%, and communication services makes up 19.1% of the ETF. Healthcare is responsible for 6.66% of the ETF. While the consumer staples sector makes up 4.66%, industrials and utilities are responsible for 2.37%.

Since the Nasdaq is an American stock exchange, it is unsurprising that 96.51% of Invesco QQQ is made up of American stocks. China is responsible for 1.97% of the ETF. Meanwhile, Argentina, the Netherlands and Israel each accounts for less than 1%.

Let’s now take a closer look at what Invesco offers and Invesco QQQ’s performance…

Trust Series 1

Known for its innovation, Invesco offers a wide variety of investment products. By the end of 2020, Invesco managed a total of $1.3 trillion in assets for clients located around the world. Today, it serves 120 different countries.

The underlying goal of Invesco is to help investors improve their portfolios. It offers active and passive investments, along with alternative strategies. Among the many different options available, you can check out popular products like the Invesco QQQ Trust Series 1.

Out of large cap growth funds, Invesco was rated the best-performing fund. Lipper created this review of the Invesco QQQ Trust Series 1 by looking at total returns for the last 15 years. To achieve this ranking, Invesco had to beat out 327 other funds. By the end of 2020, Invesco QQQ was also rated as the second-best fund in terms of liquidity. They determined this ranking by looking at the average daily trading volume.

Over time, Invesco QQQ has achieved impressive growth. If you bought $10,000 of this ETF on December 31, 2010, you would have had about 63 times more money on December 31, 2021. This works out to more than $63,000.

Like any investment vehicle, Invesco QQQ has had its ups and downs. During the last 52 weeks, its highest price for the ETF was $338.19. And the 52-week low was $179.98.

When looking at the year-to-date return, it’s close to breakeven. And the one-year return is above 70%. Although, is it a good investment going forward?

Is Invesco QQQ Trust a Good Investment?

Any investment carries a degree of risk, but there are some benefits to choosing Invesco QQQ. One of the reasons legendary investors like Warren Buffett like index funds is they provide automatic diversification. When you buy an ETF or index fund, you are essentially buying a basket of other financial products. So even if one company in the ETF goes bankrupt, you still have many other viable investments remaining.

As an ETF, Invesco QQQ includes 100 different stocks that are some of the best on the Nasdaq exchange. This diversification is great for a portfolio, and it offers excellent potential for growth. Historically, the average stock market return is 10%. Although bad years do happen, the stock market’s long-term growth has always remained positive. Because Invesco QQQ includes 100 different stocks, you are essentially investing in the broader marketplace.

On top of that, many ETFs are able to charge lower fees. Invesco QQQ is automatically rebalanced to include the top 100 Nasdaq stocks. Because of this, Invesco does not have to hire expensive stock pickers and analysts. As a result, investors have to pay an expense ratio of only 0.2%. Today, Invesco QQQ is extremely popular among growth investors.

Interested in More Opportunities Like Invesco QQQ ETF? Our Chief Investment Expert Alexander Green has time-tested investment strategies, and here’s his popular Gone Fishin’ Portfolio. Although that’s only the tip of the iceberg. To find some of his top investing opportunities, sign up for his free Liberty Through Wealth e-letter today, and start building a future to be proud of.


About

Ben Broadwater is the Director of Investment U. He has more than 15 years of content creation experience. He has worked and written for numerous companies in the financial publishing space, including Charles Street Research, The Oxford Club and now Investment U. When Ben isn’t busy running Investment U, you can usually find him with a pair of drumsticks or a guitar in his hand.

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