Investors who want to own stocks in the technology sector may decide to buy exchange traded funds (ETFs) that track the Nasdaq. The tech-heavy Nasdaq Composite is comprised of more than 2,500 companies of widely varying size and quality, including struggling players and dominant, established companies. So there is an element of high-risk, high-reward in buying individual stocks. Thus, investors seeking to diversify their holdings and mitigate risk often look to Nasdaq-focused ETFs. While QQQ tracks the Nasdaq 100, there are some alternatives that track the Nasdaq Composite, or track an equal weight version of the Nasdaq 100, or a subsection of the Nasdaq 100. For example, The Fidelity NASDAQ Composite Index Track (ONEQ) follows the broader composite and the Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE) tracks an equal weight version.
Based on trailing 12-month performance, there is just one Nasdaq-based ETF in our list of top performers for Q2 2020. The Invesco QQQ fund (QQQ), which tracks the 100 largest stocks in the composite, is the best Nasdaq-focused fund for the quarter. All figures are as of April 16, 2020.
- Performance over 1-Year: 13.3%
- Expense Ratio: 0.20%
- Annual Dividend Yield: 0.77%
- 3-Month Average Daily Volume: 64,620,440
- Assets Under Management: $92.2 billion
- Inception Date: March 10, 1999
- Issuer: Invesco
The Invesco QQQ fund is one of the oldest and most widely traded ETFs in the world. The fund tracks the Nasdaq 100, which is made up of the largest, most actively traded, non-financial companies listed on the market. The index is comprised of a broad range of companies including not only the world's biggest tech stocks, but retail, biotechnology, industrial, and health care stocks. Despite that, QQQ tends to tilt toward the technology sector, as evidenced by its top holdings: Microsoft Corp. (MSFT), the software and cloud services company; Apple, Inc. (AAPL), the diversified tech hardware, services and entertainment company; and Amazon.com, Inc. (AMZN), the giant e-commerce and cloud services company. It's important to note that because the Nasdaq 100 Index contains a different basket of companies than the broader Nasdaq Composite, QQQ does not precisely track the larger composite. Below, we'll look at the top 10 holdings for the fund.
|Top QQQ Holdings|
|Company Name (Ticker)||Percent of QQQ Assets||Description of Company|
|Microsoft Corp. (MSFT)||11.8%||Computer and software|
|Apple Inc. (AAPL)||11.4%||Computer and software|
|Amazon.com Inc. (AMZN)||10.3%||E-commerce, cloud computing|
|Alphabet Inc. (GOOG)||3.9%||Technology (Class C shares)|
|Alphabet Inc. (GOOGL)||3.9%||Technology (Class A shares)|
|Facebook Inc. (FB)||3.9%||Social media|
|Intel Corp. (INTC)||3.0%||Computer products, cloud computing|
|PepsiCo Inc. (PEP)||2.2%||Food and beverage|
|Netflix Inc. (NFLX)||2.2%||Streaming media|
|Cisco Systems Inc. (CSCO)||2.0%||Telecommunications, hardware, and software|
ETFDB.com. "QQQ Invesco QQQ," Accessed April 16, 2020.