QQQQ

What Is QQQQ?

The QQQQ is the original ticker symbol for the Nasdaq 100 Trust, an ETF that trades on the Nasdaq exchange. 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 its current ticker symbol: QQQ.

Understanding QQQQ

Although the QQQQ is now traded through the Invesco QQQ Trust, it still tracks the Nasdaq 100, a stock index listing the 100 largest Nasdaq companies by market cap. The Nasdaq 100 index comprises companies from all sectors, with the exception of financial services. These industries include retail, biotechnology, industrial, technology, health care, and many others. This fund provides an especially viable investment choice for investors seeking exposure to the tech sector, because many of the largest companies listed on the Nasdaq are blue-chip tech behemoths 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 listed on the Nasdaq 100 exchange for at least two years. But there are certain exceptions to this rule. Namely, certain companies that have been listed for only one year but have extraordinarily high market capitalizations may make the cut. All stocks need to have an average daily trading volume of 200,000 shares, and they are likewise required to report earnings on both quarterly and annual bases. Companies with bankruptcy issues are omitted from the Invesco QQQ Trust.

In 1999, this ETF began as a side project created by a few Nasdaq employees who sought to help mom-and-pop investors participate in the dotcom boom.

A Granular Breakdown of the Invesco QQQ Trust

The Invesco QQQ Trust is extremely tech-forward, with 54.72% of its assets allocated to the technology sector. Consumer cyclicals are the next highest weighted sector, with a 21.27% allocation. Meanwhile, the health care sector rounds out the top three silos, with a 13.52% allocation. All other sectors have less than a 10% allocation within the ETF, 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 notable tech stalwarts such as 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. Case in point: the popular Nasdaq Composite Index (IXIC) tracks every stock listed on the Nasdaq, including financial services names, which amounts to more than 3,000 public companies.