Let’s face it – not everyone wants to research individual stocks. That’s why index-tracking exchange traded funds can be so useful. Among the most popular ETFs is the Invesco QQQ Trust Series 1 (NASDAQ:QQQ), which includes some of the best-known names in technology. Is QQQ stock right for you, though?
It probably deserves a place in your portfolio, even if you’re an experienced stock picker. The Invesco QQQ ETF, which is managed by Georgia-based fund manager Invesco (NYSE:IVZ), has something to offer to a broad variety of investors. So, let’s crack open this famous fund and see what’s inside.
QQQ Stock: Cheap, Easy and Hard to Beat
Whether you already picked out some technology stocks or not, you can get easy, immediate exposure to some of 2023’s biggest winners with QQQ stock. Furthermore, you can let Invesco’s fund managers do the heavy lifting for a very reasonable fee.
In fact, the total annual expense ratio for the Invesco QQQ ETF is just 0.2%. Compared to the expense ratios of some other funds out there on the market, 0.2% is fairly cheap.
Just to recap, QQQ stock tracks the Nasdaq 100 index. But here’s a fun fact: The Invesco QQQ Trust Series 1 actually has 101 holdings. Still, it does a good job of tracking (i.e., following) the Nasdaq 100 index, which is technology-sector-dominated and weighted by market capitalization.
And by the way, passive income investors should be interested to know that the Invesco QQQ ETF has a 12-month distribution rate (dividend yield plus interest payments) of 0.62%. That’s in addition to the share-price appreciation, which was considerable in 2023. Impressively, the Invesco QQQ Trust Series 1 share price increased by around 54% last year.
Don’t Fight the Fed! Just Buy the Invesco QQQ ETF.
Moreover, QQQ stock includes some “Magnificent Seven” names that performed exceptionally well in 2023. Here are a few of them, along with their share-price increases from last year:
- Nvidia (NASDAQ:NVDA): Up 239%
- Meta Platforms (NASDAQ:META): Up 194%
- Tesla (NASDAQ:TSLA): Up 102%
- Amazon (NASDAQ:AMZN): Up 81%
Thus, you were in the winner’s circle in 2023 if you just held the Invesco QQQ ETF all year long. This year’s best tech-sector performers might be different, but with Invesco’s diversified Nasdaq-100-tracking ETF, you don’t have to play the difficult game of picking and predicting.
Besides, technology stocks tend to perform well when U.S. monetary policy is easing. That will likely occur in 2024, as the market expects the Federal Reserve to lower interest rates multiple times. This would reduce borrowing costs, and should provide a favorable growth environment for companies like Nvidia and Meta Platforms.
Catch the Wave of Momentum With QQQ Stock
Which famous technology stocks will be 2024’s biggest winners? Put away your crystal ball, as you don’t need to pick and predict if you own some QQQ stock.
Additionally, you’ll certainly want to have some well-known tech names in your portfolio when the Federal Reserve starts cutting interest rates. So, whether or not you’re a seasoned stock picker, keep some shares of the Invesco QQQ ETF for the rest of 2024.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.