If you want to choose an ETF to boost your profit, or you are a tech company investing maniac, then QQQ must be your good choice.
However, if you are new to investing, you may want to know more about it.
Here, I will introduce QQQ in more detail, including its composites and performance. Finally, I will share with you 3 reasons why you should invest in it.
What is QQQ？
QQQ’s full name is Invesco QQQ Trust Series 1, which was issued by Invesco in 1999.
The index QQQ tracing is Nasdaq 100, a kind of index in the series, not Nasdaq itself.
Nasdaq 100 comprises all industries, excluding Financials. Like S&P 500, Nasdaq 100 selects top 100 market value companies as its composites, and calculates their weights and the total amount.
What is the composition of it？
QQQ has the same composition as Nasdaq 100, mainly on the tech companies, like Apple, Microsoft, Google, Amazon, Nvidia。
These companies have a trait of high volatility, so as in QQQ。
Currently QQQ has involved in the following industires（data from Invesco，as of Dec. 31, 2023）：
| Industries | Weights |
| Technology | 57.64% |
| Consumer Discretionary | 19.00% |
| Health Care | 6.95% |
| Telecommunications | 5.03% |
| Industrials | 4.79% |
| Consumer Staples | 4.31% |
| Utilities | 1.23% |
| Energy | 0.49% |
| Basic Material | 0.29% |
| Real Estate | 0.27% |
Also , the top 10 composites are as below：
| Stocks | Weights |
| Microsoft | 8.80% |
| Apple | 8.24% |
| Nvidia | 5.58% |
| Amazon | 5.19% |
| Mata – Class A | 4.94% |
| Broadcom | 4.53% |
| Tesla | 2.73% |
| GOOGLE- Class A | 2.45% |
| Costco | 2.41% |
| GOOGLE- Class C | 2.39% |
How much does it charge？
The current expense ratio is 0.2%。
How does QQQ performs？
Until Jan. 31, 2024, its performance is as following：
| YTD | 1-year | 3-year | 5-year | 10-year | Since inception |
| 1.82% | 42.50% | 10.55% | 20.74% | 18.10% | 9.49% |
3 Reasons that you should invest in QQQ
As for why you should invest in QQQ, here are the reasons:
You can easily enjoy the high returns
Per performance we just showed, if you hold it in recent 5 to 10 years, you can have around 20% annual return.
Even if you purchase it from its inception in 1999, over 24 years, with big turmoil like the financial crisis in 2008, Covid-19 in the beginning of 2020, and the Fed strong rate hikes in 2022, it still can provide 9.5% annual return, and that has surpassed many investors’ long-term performance.
To enjoy such a great return, you just need to buy and hold it, no more time-consuming research and analysis.
If you see the long-term trend, it is upward, meaning that the price is still rising:
Of course, if you are confident or well-trained, and able to bear the high volatility, then you can add QQQ in your portfolio.
Tech companies are chasing the new evolution, and bring tremendous potential profit
If you look at the history of US stocks, you will find that its growth is driven by the big tech companies, like FAANG.
These companies put many resources and efforts to develop new techniques, and utilize them not only in their business, but also many enterprises around the world. This contributes so much profit for these companies, and provides sources for the growth of US stocks.
As these companies are still chasing new techniques, they can still bring more potential profit from it, and the US stock will not stop growing,
IPhone, Google search engine, Tesla EV, and AI tech, are all examples.
Best choice for tech maniac
The debut of QQQ, is good news for those are enthusiastic in tech stocks, but worry about the high risk of single stock。
You may notice that, but in fact, a large group of people are maniacs in this way. The reason is just mentioned, the tremendous potential profit behind these new techniques.
If you also have a preference on tech stocks, QQQ must be the best choice.