What is QQQQ?
QQQQ was the original ticker symbol for the Invesco QQQ Trust, an exchange-traded fund (ETF) that trades on the Nasdaq exchange. Offering broad exposure to the tech sector, it tracks the Nasdaq 100 Index, which includes the top 100 largest and most actively traded non-financial stocks on the Nasdaq. Known as ‘cubes’ or ’triple Qs,’ its current ticker is QQQ, adopted in March 2011.
Key Takeaways
- QQQQ as Historical Ticker: QQQQ was the original ticker for the Invesco QQQ Trust ETF.
- Renamed to QQQ: The ETF’s current ticker is QQQ, also known as ‘cubes’ or ’triple-Qs.’
- Tech Sector Exposure: QQQ provides broad exposure to the tech sector by tracking the Nasdaq 100 Index.
- Acts as a Blue-chip Collection: Encompasses major tech names like Microsoft and Google.
- Minor Financials Inclusion: Minimal financial services stocks are included, as of April 2023.
Understanding QQQQ
QQQQ no longer exists as a ticker, transitioning to QQQ in 2011. Officially known as the Invesco QQQ Trust, it launched in 1999, tracking the Nasdaq 100 – a stock index listing the top 100 Nasdaq companies by market cap. This index includes a variety of sectors such as consumer discretionary, industrial, health care, and technology.
The ETF attracts investors aiming for tech sector exposure, featuring giant blue-chip companies such as Google (GOOGL), Microsoft (MSFT), and Qualcomm (QCOM).
Companies in the QQQ must be listed on the Nasdaq 100 for at least two years, with certain high market capitalization exceptions. All stocks must maintain an average daily trading volume of 200,000 and report earnings quarterly and annually. Companies with bankruptcy issues are excluded. By March 31, 2023, QQQ hosted $172.57 billion in assets under management.
Composition of the Invesco QQQ Trust
The Invesco QQQ Trust is technology-heavy but spans multiple sectors. Below are its sector allocations as of April 3, 2023:
| Sector | Allocation |
|---|---|
| Information Technology | 49.49% |
| Communication Services | 16.41% |
| Consumer Discretionary | 14.71% |
| Health Care | 6.28% |
| Consumer Staples | 6.00% |
| Industrials | 4.33% |
| Financials | 1.19% |
| Utilities | 1.15% |
| Energy | 0.43% |
| Not Classified | 0.24% |
The ETF tracks only the Nasdaq 100 Index, maintaining a more focused yet narrower scope compared to other Nasdaq indices. Here are its top ten holdings as of April 3, 2023:
| Rank | Company Name | Allocation |
|---|---|---|
| 1. | Microsoft Corp. | 12.52% |
| 2. | Apple Inc. | 12.44% |
| 3. | Amazon.com Inc. | 6.17% |
| 4. | NVIDIA Corp. | 5.27% |
| 5. | Alphabet Inc. Class A | 3.73% |
| 6. | Alphabet Inc. Class C | 3.68% |
| 7. | Tesla Inc. | 3.62% |
| 8. | Meta Platforms Inc. Class A | 3.62% |
| 9. | Broadcom Inc. | 2.04% |
| 10. | PepsiCo Inc. | 1.92% |
QQQ Advantages and Disadvantages
Advantages
- Diversification: Gain exposure to 100 Nasdaq 100 Index stocks.
- Cost Efficiency: Offers a low .20% expense ratio, minimizing fee impact on returns.
- Attractive Returns: High focus on tech and transformative sectors provides high return potential.
- High Liquidity: Millions of shares trade daily, ensuring efficient pricing and easy trading.
Disadvantages
- Narrow Focus: Though diversified, it consists of just 100 stocks, overwhelmingly in the tech space.
- Nasdaq Exclusivity: Tech investors miss out on major non-Nasdaq-listed tech firms.
- High Risk: Potentially high volatility comes with tech sector concentration.
- Underperformance Risk: There is potential for underperformance due to fees and market trends.
What Is the Difference Between QQQ and QQQQ?
QQQ is the current ticker for the Invesco 100 Trust ETF, previously known as QQQQ before its change in 2011.
What Are the Benefits of QQQQ?
Investing in QQQ offers convenient diversification, potentially higher returns from tech and innovative industries, and high liquidity due to its active trading volume.
Does QQQ Pay Dividends?
Yes, it does. The Nasdaq 100 Index, which QQQ tracks, saw its dividend growth surge by 433% from 12/31/2011 to 12/31/2021.
The Bottom Line
The ticker symbol QQQQ is a part of history, now rebranded as QQQ since 2011. However, this name change didn’t alter its mission – it continues to track the Nasdaq 100 Index, offering broad tech sector exposure.
Related Terms: ETF, Nasdaq, stock market, tech sector.
References
- ETF.com. ‘“Q’s’ ETF Ticker Changes to ‘QQQ’”.
- Invesco QQQ. “Sector Allocations”.
- Nasdaq. “Invesco QQQ Celebrates 20 Years of Curating Innovation”.
- Nasdaq. “Nasdaq® 100 Companies”.
- Invesco. “QQQ - Invesco QQQ; Fund Holdings”.
- Nasdaq. “NASDAQ-100 Index® NDX”, Page 2.
- YCharts. “Invesco QQQ Trust”.
- Nasdaq. “Nasdaq Composite Index”.
- Invesco QQQ. “Top Ten Holdings”.
- Invesco QQQ. “How QQQ can fit into your portfolio”.
