Amid a flurry of stellar earnings reports from high-growth, mega-cap companies, the Invesco QQQ jumped 4% last week, extending its year-to-date gain to 25%. The S&P 500 is up just 1.45%.
Invesco QQQ offers investors access to global growth companies, excluding the securities of financial companies, and is the 5th largest ETF listed in the U.S. Launched in 1999, QQQ has a live track record of over 21 years (fund inception: March 10, 1999) and offers one of the longest performance histories available in an ETF.
“Apple shares surged to reach a high of $413.33 and were last up 7.36% at $413.09 in the wake of blowout quarterly results and a four-for-one stock split announcement,” reports Reuters. “Amazon gained 3.73% after posting its biggest profit ever while Facebook jumped 7.76% after the social media giant blew past revenue expectations.”
Apple shares finished 10.47% higher Friday, providing the iPhone-maker with a market valuation of $1.84 trillion. Saudi Aramco, which had been the most valuable publicly listed company since its market debut last year, now comes in second place at $1.76 trillion as of its last close.
Apple had vigorous third quarter earnings, released Thursday, which advanced its stock, as investors cheered the company’s 11% year-over-year growth. Apple also announced a 4-for-1 stock split. The tech behemoth has recovered from its pandemic low-point in March, and shares are now 44% higher this year.
QQQ: Performance Matters
As Apple indicates, sector weights, even in broader market benchmarks, matter when it comes to investors’ long-term outcomes.
“The Nasdaq-100 and S&P 500 are two of the most popular equity indexes in the US. The Nasdaq-100 is heavily allocated towards top performing industries such as Technology, Consumer Services, and Health Care, which have helped the Nasdaq-100 outperform the S&P 500 by a wide margin between Dec. 31, 2007 and June 30, 2020,” according to Nasdaq Global Indexes.
That trend may continue for some time given younger investors’ taste for tech and consumer cyclical stocks.
Apple is still very popular with young people. Most consumers are very familiar with the brand name and purchase iPhones and Apple products due to fashions and trends in pop culture and therefore it is unlikely that Apple is going anywhere anytime soon.
“The largest allocations to both Technology and Consumer Services helped propel the Nasdaq-100 Index to a new all-time high on June 23, 2020, extending the historic outperformance observed during 1Q’20,” according to Nasdaq. “The Nasdaq-100 finished the first half of the year with a gain of 16.9%, significantly outpacing the S&P 500’s loss of 3.1%.”
For more on innovative portfolio ideas, visit our Nasdaq Portfolio Solutions Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.