Extolling The Virtues Of QQQ [PowerShares QQQ Trust, Series 1 (ETF), ProShares Ultra QQQ (ETF)]

facebook nasdaqDavid Fabian: A new 14-year high in the NASDAQ-100 Index is certainly something to celebrate for investors that have ridden the ups and downs of these growth stocks since the start of the 21st century.

Veteran traders will remember the exuberant sentiment that pushed the top NASDAQ index to stratospheric heights, only to watch it unwind with devastating results.

Now, over a decade later, this technology-heavy basket of stocks is in sight of its all-time highs and appears poised to reach that level based on its current trajectory.

Most investors access the NASDAQ-100 index through the widely followed PowerShares QQQ (QQQ).

This exchange-traded fund boasts total asset of over $40 billion spread amongst the 100 largest domestic and international non-financial companies listed on the NASDAQ stock exchange.

The index was conceived in March 1999 and continues to be one of the foremost market indicators along with the SPDR S&P 500 ETF (SPY) and iShares Russell 2000 ETF (IWM).


As a whole, QQQ has an overwhelming 60% slant towards the information technology sector. Apple Inc (AAPL), Microsoft Corp (MSFT), and Google Inc (GOOG) make up the top three holdings of this market-cap weighted ETF. AAPL in particular accounts for nearly 14% of the entire fund.

Follow on categories are split between consumer discretionary and healthcare sectors, which are largely dominated by cutting edge biotechnology names.

What you won’t find in QQQ is any energy, financial, or utilities stocks.

It’s also interesting to note how QQQ has evolved over time to include new high growth companies. Many household names such as Facebook (FB) and Google (GOOGL) have only been available as public companies long after the debut of the original NASDAQ-100 index.

They have worked their way into this basket through sheer offering size and stock price velocity over time as the constituents are evaluated on a quarterly basis.

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