The Invesco QQQ Trust, Series 1 (NASDAQ:QQQ) is an exchange-traded fund that tracks the Nasdaq-100 index. Whether you're familiar with the fund or not, chances are you've seen their ticker (QQQ) around a lot, as it's the 2nd most traded ETF in the US. The index itself includes the 100 largest non-financial companies that are traded on Nasdaq's stock exchange, which the fund closely mimics. It's important to note that both of them are heavily focused on tech companies, with 50% of the fund's $300 billions in managed assets being shares of big tech companies.
QQQ performance history
Since its inception back in March 1999, QQQ's total return as of October 21, 2024 was 1039.66%, with an annual return rate of 9.96%, assuming all the dividends were reinvested. Compared to SPDR S&P 500 ETF Trust (SPY), which produced a lesser annual rate of 7.94% for the exact same period, QQQ did perform better, but that number could've been even much higher for that period and here is why. QQQ was introduced in the midst of the dot-com bubble, exactly one year before its peak. The bubble burst in March 2000; prices went into a free fall and only managed to stabilize by early 2003. Had you invested at the beginning of 2003, the total return would have been 1937.16%.
QQQ top 10 holdings
QQQ offers exposure to innovative and disruptive large tech companies that drive transformative themes like cloud computing, big data, augmented reality, mobile payments, and electric vehicles. Their current top 10 holdings as of October 18, 2024 are:
- Apple Inc
- NVIDIA Corp
- Microsoft Corp
- Broadcom Inc
- Meta Platforms Inc Class A
- Amazon.com Inc
- Tesla Inc
- Costco Wholesale Corp
- Alphabet Inc Class A
- Alphabet Inc Class C
These 10 companies make up 50.61% of the fund. While information technology is the main sector of the fund with a 50.53% allocation, the 2nd largest sector is communication services with a 15.83% allocation, followed by consumer discretionary and other sectors such as consumer staples, health care, industrials, and materials. The high exposure to the tech industry offers great growth potential, but it comes with the risk of big declines during bear markets, like happened during the dot-com bubble as mentioned earlier.
How much would you have if you invested in QQQ 10 years ago?
Using Stoculator's stock calculator, a $1,000 invested in QQQ 10 years ago would be worth $5,193.51, assuming the dividends were reinvested (as of October 21, 2024). That's an annual return rate of 17.92% with a total return of 419.35%.
A $1,000 invested in QQQ 5 years ago would be worth $2,606.89, assuming the dividends were reinvested (as of October 21, 2024). That's an annual return rate of 21.12% with a total return of 160.69%.
Stoculator's calculator could be used to check the numbers for different periods and investment amounts.