The Invesco QQQ ETF Trust (QQQ 0.31%) is a popular choice for investors seeking growth opportunities. This exchange-traded fund tracks the Nasdaq-100 index, focusing heavily on technology stocks. Over the past decade, it has outperformed the S&P 500 index, delivering returns of around 400% compared to 175%. However, it is important to note that the QQQ carries significant risks and tends to experience larger losses than the S&P 500 during bear markets.
To invest in the Invesco QQQ ETF, you need to open a brokerage account and follow the same steps as buying individual stocks. The fund’s largest holdings include tech giants like Microsoft, Apple, and Nvidia. It is market-cap weighted, with tech stocks dominating its holdings. In 2020, Invesco launched another fund called the Invesco NASDAQ 100 ETF (QQQM 0.38%), which tracks the same index but with lower fees.
The expense ratio for the Invesco QQQ ETF is 0.2%, meaning that $20 of a $10,000 investment goes towards fees. The fund pays a modest annual dividend yield of 0.60%, as growth stocks typically reinvest profits rather than paying out dividends. Historical performance shows that the QQQ has delivered impressive returns over the years, outperforming the S&P 500 in the long term.
Investors considering the Invesco QQQ ETF should be aware of the high level of risk involved. It is not a substitute for more diversified funds like S&P 500 ETFs. The QQQ is suitable for those with a long time horizon, high tolerance for volatility, and looking for exposure to high-growth tech stocks.
Overall, the Invesco QQQ ETF can be a valuable addition to a well-diversified portfolio for investors seeking growth opportunities. However, it is essential to understand the risks and ensure it aligns with your investment goals before buying shares.