Should Invesco QQQ (QQQ) Be on Your Investing Radar?

Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the Invesco QQQ (QQQ), a passively managed exchange traded fund launched on 03/10/1999.The fund is sponsored by Invesco. It has amassed assets over $305.81 billion, making it the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.Why Large Cap GrowthLarge cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.CostsExpense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.Annual operating expenses for this ETF are 0.20%, making it one of the cheaper products in the space.It has a 12-month trailing dividend yield of 0.56%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation to the Information Technology sector--about 49.90% of the portfolio. Telecom and Consumer Discretionary round out the top three.Looking at individual holdings, Apple Inc (AAPL) accounts for about 8.81% of total assets, followed by Microsoft Corp (MSFT) and Nvidia Corp (NVDA).The top 10 holdings account for about 50.81% of total assets under management.Performance and RiskQQQ seeks to match the performance of the NASDAQ-100 Index before fees and expenses. The Nasdaq-100 Index includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization.The ETF has gained about 23.95% so far this year and is up about 37.76% in the last one year (as of 11/07/2024). In the past 52-week period, it has traded between $370.07 and $505.58.The ETF has a beta of 1.10 and standard deviation of 23.67% for the trailing three-year period, making it a medium risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.AlternativesInvesco QQQ holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, QQQ is a great option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.The iShares Russell 1000 Growth ETF (IWF) and the Vanguard Growth ETF (VUG) track a similar index. While iShares Russell 1000 Growth ETF has $101.50 billion in assets, Vanguard Growth ETF has $148.20 billion. IWF has an expense ratio of 0.19% and VUG charges 0.04%.Bottom-LineWhile an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco QQQ (QQQ): ETF Research Reports Apple Inc. (AAPL): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report iShares Russell 1000 Growth ETF (IWF): ETF Research Reports Vanguard Growth ETF (VUG): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks