What was 'QQQQ'
QQQQ was the previous ticker symbol for the Nasdaq 100 Trust, an ETF that trades on the Nasdaq. This security offers broad exposure to the tech sector by tracking the Nasdaq 100 Index, which consists of the 100 largest and most actively traded non-financial stocks on the Nasdaq. It is also known as "cubes" or the "quadruple-Qs," but is now commonly known as the PowerShares QQQ Trust or QQQ, its current ticker symbol.
BREAKING DOWN 'QQQQ'
Although the QQQQ ETF is now known as the PowerShares QQQ Trust, it still indexes the Nasdaq 100, a stock index of the 100 largest companies listed on the Nasdaq by market cap. The Nasdaq 100 index is comprised of companies from almost all sectors except for financial services. These non-financial sectors include retail, biotechnology, industrial, technology, health care and others. It provides a good investment choice for those who seek exposure to the tech sector, because many of the larger companies listed on the Nasdaq are blue chip tech stocks such as Google, Microsoft and Qualcomm.
Requirements for Inclusion in the PowerShares QQQ Trust
All companies in the PowerShares QQQ Trust must be part of the Nasdaq 100 and have to be listed on the Nasdaq exchange for at least two years. Some exceptions are made for companies that have been listed for one year but have extremely high market capitalizations. All stocks need to have an average daily trading volume of 200,000 and are required to report earnings both quarterly and annually. Companies with bankruptcy issues are omitted from the PowerShares QQQ Trust.
Breakdown of the PowerShares QQQ Trust
The PowerShares QQQ Trust is tech-heavy and has a total of 54.72% allocated toward the technology sector. Consumer cyclicals is the next highest sector, with a 21.27% allocation, and the health care sector rounds out the top three with a 13.52% allocation. All other sectors have less than a 10% allocation within the PowerShares QQQ Trust, with consumer non-cyclicals, industrials and telecommunications rounding out the top six sectors represented.
It's no surprise then that eight of the PowerShares QQQ Trust's top 10 company holdings are technology firms. Notable technology holdings include Apple, Microsoft, Amazon, Google, Facebook, Intel and Cisco. It should be noted that the PowerShares QQQ Trust tracks limited stocks when compared to other Nasdaq ETFs. For example, the popular Nasdaq Composite Index (IXIC) is much larger in that it tracks every stock listed on the Nasdaq, including financial services. The IXIC tracks more than 3,000 public companies.