Categories: Exchange Traded Funds (ETFs)TechnologyU.S. Investing

This is a Fund You Can Track on the Ticker Tape

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’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.

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.

Doug Fabian

Doug Fabian is the Editor of Weekly ETF Report, a free weekly e-newsletter, and the newsletter Successful ETF Investing. He’s also the host of the syndicated radio show, “Doug Fabian’s Wealth Strategies.” Doug also edits the fast-paced trading service ETF Trader’s Edge, for investors who want to take their profits to the next level. Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert’s Investment Digest. Doug became a member of the “SmartMoney 30” in 1999 — a listing of the most influential individuals in the mutual fund industry. In the feature, SmartMoney magazine exclaims that Doug is the best-known “trend follower” among the $56 billion (and growing) group of financial advisors. In 2001, Doug wrote “Maverick Investing,” published by McGraw-Hill. He also regularly appears at seminars around the country, stands out on the pages of the largest newspapers (The Wall Street Journal, The Los Angeles Times, and The New York Times), and speaks on national television (CNBC, Fox News, and Bloomberg Forum). For more than 35 years, Successful ETF Investing (formerly the Telephone Switch Newsletter and Successful Investing) has produced double-digit percentage annual gains. Doug has become known for his expert knowledge and timely use of innovative tools, such as exchange-traded funds, bear funds, and enhanced-index funds to profit in any market climate. For more information about Doug’s services, go to http://www.fabian.com/