Many look to the Invesco QQQ Trust (NASDAQ: QQQ) as a way to capture the high growth stocks that have come out with innovative solutions and products.
“When you talk about the Nasdaq-100, it all comes down to what is the composition of the index. What’s the methodology that drives that composition. And so today, the QQQs represents the 100 largest companies listed on the Nasdaq market. So inherently, you’re going to have a tilt toward technology. You’re going to have a tilt toward healthcare and biotech – huge multinational consumer brands, companies that are really driving that global growth and innovation story,” Robert Hughes, VP and Head of Index and Advisory Services, Nasdaq Global Indexes, said at the Inside ETFs conference.
“When you look at it under the hood, right. What’s been driving the bus: technology, communication services, and consumer discretionary – our three largest overweights. I mean from there, Apple, Microsoft, Amazon.com, Alphabet, Facebook, right – the heavy hitters. Performances have been excellent,” Ryan McCormack, QQQ Strategist, Invesco, said.
The Invesco QQQ is based on the Nasdaq-100 Index, which includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization.
Current top sector weights include information technology 47.5%, communication services 20.2% and consumer discretionary 15.3%. Top weights include MSFT 12.1%, AAPL 11.2%, AMZN 9.5%, GOOG 3.9%, GOOGL 3.9%, FB 3.8%, INTC 3.1% and PEP 2.2%.
The ETF’s portfolio of high growth names has been an attractive selling point to investors. Invesco’s QQQ has beaten the Nasdaq Composite Index in 100% of the 10-year rolling periods as of the end of 2019. Additionally, QQQ is rated among the top 1%, best-performing large-cap growth funds over the past ten years by Lipper and Morningstar.
Watch Ryan McCormack and Robert Hughes Discuss Growth Stocks:
For more ETF-related commentary from Tom Lydon and other industry experts, visit our video category