What is QQQQ
The QQQQ is the original 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" and is now listed under the Invesco QQQ Trust or QQQ, its current ticker symbol.
BREAKING DOWN QQQQ
The QQQQ is now traded through the Invesco QQQ Trust, but it still tracks the Nasdaq 100, a stock index of the 100 largest companies listed on the Nasdaq by market cap. The Nasdaq 100 index comprises 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 investors seeking exposure to the tech sector, because many of the largest companies listed on the Nasdaq are blue chip tech stocks such as Google (GOOGL), Microsoft (MSFT), and Qualcomm (QCOM).
Requirements for Inclusion in the Invesco QQQ Trust
All companies in the Invesco 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 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 Invesco QQQ Trust.
Breakdown of the Invesco QQQ Trust
The Invesco QQQ Trust is tech-heavy and has a total of 54.72% allocated to the technology sector. Consumer cyclicals are 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 Invesco 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 Invesco QQQ Trust's top 10 company holdings are technology firms. Notable technology holdings include Apple, Microsoft, Amazon, Google, Facebook, Intel, and Cisco. It's worth noting the Invesco QQQ Trust tracks a limited number of stocks compared to other Nasdaq ETFs. For example, the popular Nasdaq Composite Index (IXIC) tracks every stock listed on the Nasdaq, including financial services. The IXIC tracks more than 3,000 public companies.