This is a Fund You Can Track on the Ticker Tape

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.
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This week’s ETF is among the most well known funds in existence. It is the sixth-largest ETF in size and taps into a different but related segment of the domestic market compared to the funds we have discussed so far in this series on the world’s largest ETFs. The PowerShares QQQ Trust (QQQ) focuses on the Nasdaq 100 Index.

The Nasdaq 100 is an index that holds some of the largest-cap companies in the United States, but it restricts its holdings to nonfinancial firms. Traditionally, this focus has resulted in an index that has a heavy weighting in technology, though this bias is less pronounced now than Nasdaq’s historical reputation as a haven for technology companies would indicate. The index has its holdings readjusted annually, allowing for turnover.

The last 12 months have been excellent for QQQ, which rose 19.14% as the Nasdaq performed well. QQQ has risen 2.66% so far in 2015. This fund also offers a dividend yield of 1.37%. It manages $40.1 million in assets and has an expense ratio of 0.20%.

QQQ_021315

QQQ’s 10 largest holdings comprise 48.01% of its assets. These holdings include such well-known names as Apple Inc. (AAPL), 15.00%; Microsoft Corp. (MSFT), 7.18%; Google Inc. (class C shares) (GOOG), 3.73%; Amazon.com Inc. (AMZN), 3.53%; and Facebook, Inc. (FB), 3.43%. All but one, GILD, of QQQ’s 10 largest holdings are in the technology sector.

If you find the Nasdaq index the most intriguing of the major U.S. indexes, PowerShares QQQ Trust (QQQ) is an accessible and easy way to give your portfolio large-cap tech exposure.

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If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed it, I encourage you to read my e-letter column from last week about a large emerging markets ETF. I also invite you to comment in the space provided below.

previous article

At the outset of the year, I argued that international equity exchange-traded funds (ETFs) likely would outperform domestic equity ETFs.

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