The top five holdings of this fund are: Microsoft Corp (MSFT, 11.92%), Apple Inc (AAPL, 11.19%), Amazon.com Inc (AMZN, 9.58%), Facebook Inc A (FB, 3.98%), and Alphabet Inc A (GOOGL, 3.96%).
Invesco QQQ Trust (QQQ)
From Moneyletter
Invesco QQQ Trust based on the Nasdaq-100 Index, which encompasses 100 of the largest domestic and international non-financial companies listed on the Nasdaq Stock Market based on
market capitalization. Both the fund and index are rebalanced quarterly and reconstituted annually. Reconstitution involves revising the list of constituent stocks.
Worth noting—the fund is the sixth most actively traded US ETF, and is the fifth largest ETF in terms of assets, according to ETFdb.com. The fund and index’s emphasis on the largest stocks and elimination of financial firms results in a technology heavy portfolio—about 47% of assets. Hence, large-cap technology stocks’ performance plays a big part in this fund’s performance.
The fund is also concentrated when looking at individual holdings. Microsoft accounts for almost 12% of assets, and the top ten stocks (four in the Information Technology sector and four in Communications) account for just shy of 54% of assets.
The average market cap for the fund’s holdings is more than $500 billion. To give you a point of reference, small cap stocks are considered to be under $3.5 billion; mid-cap $3.5b–$9.0b; and large-cap above $9 billion. In addition, the fund maintains a low expense ratio. The gross expenses for the Trust for 2019 were 0.20% of the Net Asset Value, and the fund has committed to cap the annual expenses at that level.
This ETF consistently outperforms the Russell 1000. It has finished in the top quartile of funds in its category nine of the last 10 years. In addition, it has also outperformed the broad stock market (as measured by the Vanguard 500 Index Fund) for nine of the last 10 years.
QQQ is currently ranked #1 in our Domestic Stock Fund list. It is a steady long-term performer and would serve as an excellent core holding for any long-term portfolio.
Brian W. Kelly, Moneyletter, www.moneyletter.com, 800-890-9670, April 2020