What Is the Invesco QQQ ETF?

The Invesco QQQ ETF is an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index. Because it passively follows the index, the QQQ share price goes up and down along with the tech-heavy 澳洲幸运5官方开奖结果体彩网:Nasdaq 100.

澳洲幸运5官方开奖结果体彩网:Passive management keeps fees low, and investors are rewarded with the full gains of the vola💫tile index if it rises. But they must also bear the Nasdaq 100’s full losses when it falls.

In this article, we explain how the QQQ ETF works and consider the risks and rewജards associated with trading the QQQ.

How the Invesco QQQ ETF Works

QQQ has 101 holdings and is the 14th-most popular ETF in the world by three-month average daily share volume. The index excludes financial companies and is based on 澳洲幸运5官方开奖结果体彩网:market capitalization. Like the Nasdaq 100, QQQ holdings are heavily weighted toward 澳洲幸运5官方开奖结果体彩网:large-cap technology companies. The 澳洲幸运5官方开奖结果体彩网:assets under management (AUM) of QQQ were over $299 billion as of April 30, 2025.

The Invesco QQQ ETF was previously known as the PowerShares QQQ Trust ETF. It is also informally called the triple-Qs or the cubes. The QQQ ETF is often viewed as a snapshot of how the 澳洲幸运5官方开奖结果体彩网:technology sector is trading.

The Nasdaq 100 Index that the QQQ share price follows is based on a modified capitalization methodology. This modified method uses individual weights of included items according to their market capitalization. Weighting allows🐬 constraints to limit the influence of the largest companies and balance the index with all of its members. To accomplish this, Nasdaq reviews the composition of the index each quarter an𝔉d adjusts weightings if the distribution requirements are not met.

The Invesc♚o QQQ ETF offers the public an easy way to invest in the 100 largest nonfinancial companies listed on the Nasdaq.

QQQ ETF Sectors

The Invesco QQQ ETF tracks many high-tech sectors, including information technology (IT), communications services, and healthcare. The QQQ is 澳洲幸运5官方开奖结果体彩网:rebalanced quarterly and reconstituted annually🦂 to tr🤪ack the Nasdaq 100 Index.

It is important to remember that some of the companies people associate with technology are generally classified in other sectors. For example, Alphabet Inc. (GOOGL, Google’s parent company) and Meta Platforms Inc. (META, formerly known as Facebook) are under the 澳洲幸运5官方开奖结果体彩网:communications services sector. Amazon.com Inc. (AMZN) is part of the 澳洲幸运5官方开奖结果体彩网:consumer discretionary sector.

The sector breakdown of the Invesco QQQ ETF as of March 31, 2025, appears in the table below.

QQQ ETF Top Holdings

The top 10 stocks in the Invesco QQQ ETF made up over 49% of all QQQ holdings as of Q2 2025. They are given in the table below.

The top holding of the QQQ ETF is Apple Inc. (AAPL), which had a market cap of more than $3.19 trillion as of April 30, 2025.

Meanwhile, Nvidia (NVDA) became one of the top-performing tech stocks in 2024. Apple, Alphabet, and Amazon all have strong 澳洲幸运5官方开奖结果体彩网:operating cash flows and are very popular with investors and funds. Most of these top stock holdings consistently deliver on the bottom line and are able to navigate change without harming their investors. While still offering legacy products like operating systems, Microsoft (MSFT) has successfully reinvented itself, transitioning to its cloud-based Azure and 澳洲幸运5官方开奖结果体彩网:artificial intelligence.

QQQ Dividend History

QQQ Pros and Cons

Like most assets, the QQQ ETF has specific strengths and weaknesses that investors need to consider before putting it in their 澳洲幸运5官方开奖结果体彩网:portfolios.

QQQ Pros

• Big 澳洲幸运5官方开奖结果体彩网:bull market rewards: If you’re feeling bullish or want a bullish investment for an asset allocation, the QQQ ETF is a good choice. The QQQ price increases more than the S&P 500 during bull markets.
• Long-term growth potential: QQQ holdings include many companies that develop new technologies. That gives the QQQ ETF more potential for long-term growth. QQQ is also much more diversified across the growth technology sector. This means it is safer to diversify capital allocation in the tech sector through investment in QQQ than making individual investments.
• Liquidity: Frequent traders need to buy and sell quickly at a low cost. The QQQ ETF offers them this 澳洲幸运5官方开奖结果体彩网:liquidity. AUM for QQQ reached more than $299 billion in 2025, and volume was over 65 million shares per day, providing a large market for traders.
• Low expenses: The QQQ ETF’s 澳洲幸运5官方开奖结果体彩网:expense ratio is 0.2%. Reducing the expense ratio is important because fees can seriously hurt investment earnings.

QQQ Cons

• High 澳洲幸运5官方开奖结果体彩网:bear market risk: Just as QQQ tends to outperform the S&P 500 during bull markets, it also often underperforms it during bear markets. In particular, the QQQ share price declined significantly when the dotcom bubble collapsed.
• 澳洲幸运5官方开奖结果体彩网:Volatility risk: Tech sector stocks are growth stocks and are more volatile than the rest of the market. As a result, the Nasdaq 100 also makes many more significant daily, monthly, and annual moves than other indexes, such as the S&P 500. For example, the fund had annual returns of -0.12% in 2018, 38.96% in 2019, -32.58% in 2022, and 54.85% in 2023.
• Nasdaq-only focus: The fund has a Nasdaq-only focus and excludes successful tech companies listed on other exchanges. For example, Salesforce.com Inc. (CRM), which is listed on the New York Stock Exchange (NYSE), is not included in the index. Neither are Oracle Corp. (ORCL) and Block Inc. (XYZ), both of which are listed on the same exchange.
• Sector risk: The root cause of the QQQ ETF’s high risks and rewards is that it places more weight on volatile technology-related sectors than the S&P 500. There is also a sector risk that Nasdaq 100 stocks will eventually become less important, much like the railroad companies that once dominated the Dow Jones Transportation Average (DJTA). Investors already talk about old tech stocks vs. mostly newer 澳洲幸运5官方开奖结果体彩网:FAANG stocks within the Nasdaq.
• High 澳洲幸运5官方开奖结果体彩网:valuation levels: QQQ holdings tend to be too expensive by most of the standards that value investors use. For example, QQQ had a 澳洲幸运5官方开奖结果体彩网:price-to-earnings (P/E) ratio of 30.60 on April 30, 2025.
• No small-cap stocks: Because the QQQ ETF holds only 100 of the Nasdaq’s largest companies, it necessarily excludes 澳洲幸运5官方开奖结果体彩网:small-cap stocks. Small caps outperformed larger companies in the long run, according to research by 澳洲幸运5官方开奖结果体彩网:Fama and French. Furthermore, growth investing also emphasizes small companies because they have more room to grow.

QQQ Performance

Being more heavily weighted toward growth stocks and high-tech sectors, the Nasdaq 100 (and, by extension, the QQQ ET🌺F, which tracks the index) has outperformed the broader S&P 500 over💯 the past several years.

As the chart below depicts, over the nearly seven-year period from Q3 2017 through Q2 2025, the QQQ has returned 240.7%, but SPY (an S&P 500 ETF) returned 108.97%.

The Bottom Line

The Invesco QQQ ETF checks many of the boxes that short-term traders look for in ETFs, and it has significant advantages for long-term investors. The ETF offers liquid, cost-efficient exposure to a tech-heavy basket of large-cap, innovative companie꧒s. Furthermore, investors benefit from increases in the QQQ share price without being burdened by stock-picking issues.

But those advantages are offset by sector concentration and vola🀅tility. Stocks contained within the index also have significantly high valuation levels and P/E ratios. This makes them susceptible to steep increases or declines. There are no small-cap stocks in the index to minimize the reliance on large-cap tech stocks.🌌