One of the biggest and oldest exchange-traded funds, PowerShares QQQ (symbol QQQ) is a low-cost and easy way to invest in large-company growth stocks in general and big technology firms in particular. Tech accounts for a whopping 64% of the ETF's assets.
QQQ has a distinct personality. It tracks the Nasdaq 100 index, which consists of the 100 largest stocks, ranked by market value, on the Nasdaq Stock Market. The index includes both U.S. and foreign firms but excludes financial stocks. With Nasdaq the preferred exchange for tech and biotech companies, the index typically holds some of the market's hottest growth stocks.
(Editor's Note: After the April 29 market close, NASDAQ will rebalance the index to reduce the outsized role of Apple (AAPL). The tech titan now accounts for about 21% of the index's -- and the ETF's -- assets. The change will drop Apple's share of the index and ETF to a still hefty 12%. For more about the company, see Apple: The Core of Every Portfolio?)
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Among its nontech holdings, QQQ includes well-known companies such as Starbucks, Comcast and Israel's Teva Pharmaceutical. One of its quirks is that it owns no energy stocks.
Not surprisingly, QQQ is volatile. Over the past five years, it has been about 20% jumpier than Standard & Poor's 500-stock index. Surprisingly, QQQ lost less than the S&P 500 during the 2007-09 bear market, falling 51.6%, compared with the S&P 500's 55.3% drop.
As for the odd name, the ETF originally traded on the American Stock Exchange as Nasdaq 100 Index Tracking Stock under the symbol QQQ. Traders called it the triple Q, or "Qubes," for short. When the ETF moved to Nasdaq in 2004, it needed a four-letter ticker, so an extra Q was added. In 2006, PowerShares bought the ETF from Nasdaq and renamed it PowerShares QQQ. (Editor's Note: The ETF retained the quadruple-Q ticker until March 23, 2011, when the symbol was changed back to QQQ.)
-
Super Micro Computer: Why This Hot Stock Could Hit $1,500Super Micro Computer's long-term AI revenue potential is underappreciated, Loop Capital says. Here's what you need to know.
-
Instant EV Tax Rebates Are a Hit: $580M Paid This YearEV Credits Claiming federal electric vehicle tax credits at the point of sale is a new and popular option in 2024.
-
Best Banks for High-Net-Worth Clientswealth management Kiplinger's 2023 list of the best banks for higher-net-worth clients.
-
Stock Market Holidays in 2024: NYSE, NASDAQ and Wall Street HolidaysMarkets When are the stock market holidays? Take a look at which days the NYSE, Nasdaq and bond markets are off in 2024.
-
Stock Market Trading Hours: What Time Is the Stock Market Open Today?Markets When does the market open? It's true the stock market does have regular hours, but trading doesn't necessarily stop when the major exchanges close.
-
Bogleheads Stay the CourseBears and market volatility don’t scare these die-hard Vanguard investors.
-
I-Bond Rate Is 5.27% for Next Six MonthsInvesting for Income I-Bonds issued November 1, 2023 through April 30, 2024 will have a rate of 5.27%.
-
What Are I-Bonds?savings bonds Inflation has made Series I savings bonds enormously popular with risk-averse investors. So how do they work?
-
This New Sustainable ETF’s Pitch? Give Back Profits.investing Newday’s ETF partners with UNICEF and other groups.
-
As the Market Falls, New Retirees Need a Planretirement If you’re in the early stages of your retirement, you’re likely in a rough spot watching your portfolio shrink. We have some strategies to make the best of things.
