The Invesco QQQ (QQQ) was launched on March 10, 1999, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $392.81 billion, making it the largest ETF attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies usually have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.2%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.47%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, 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 54.7% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 9.39% of total assets, followed by Microsoft Corp (MSFT) and Apple Inc (AAPL).
The top 10 holdings account for about 52.88% of total assets under management.
Performance and Risk
QQQ 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 added roughly 18.47% so far this year and was up about 22.14% in the last one year (as of 11/18/2025). In the past 52-week period, it has traded between $416.06 and $635.77.
The ETF has a beta of 1.16 and standard deviation of 20.09% 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.
Alternatives
Invesco QQQ holds a Zacks ETF Rank of 1 (Strong 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 $121.48 billion in assets, Vanguard Growth ETF has $195.97 billion. IWF has an expense ratio of 0.18% and VUG charges 0.04%.
Bottom-Line
While 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.
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Invesco QQQ (QQQ): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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