Among the types of investments available on the market today, a key role is undoubtedly played by ETFs, and in particular by the Invesco QQQ ETF. Let’s see in detail what it is.
Invesco QQQ ETF: What it is and How it works
In finance, the term ETF (Exchange-traded fund) indicates that type of product composed of a set of securities, whose portfolio of shares represents the composition of a certain index to which it refers. The peculiarities that characterize ETFs are that they are traded on the stock exchange like normal shares, and replicate in an exact manner the trend and fluctuations of certain specific stock indices, whether they are bonds or commodities.
Founded in 1999, the Invesco QQQ ETF faithfully replicates the Nasdaq-100 Index, the equity index of the largest 100 non-financial companies currently listed on the American NASDAQ market. You can place it in the 1% richest category among all large-cap growth funds, consistently beating its big brother, the S&P 500, in performance.
Investing in the Invesco QQQ ETF therefore translates into choosing one of the most solid and established markets on the entire planet: the NASDAQ. This marketplace offers in fact, unlike other countries, many of the best performing equities of the last 15 years, in the technology field and beyond. And seeing the ever-growing trends, the constant evolution of the digital world, and the imminent arrival of the revolutionary and long-awaited web 3.0, it seems that actually it is not a bad choice at all.
As a matter of fact, inside it is possible to find a wide and diversified selection of the main large capitalization stocks, today listed in the NASDAQ. The companies that are part of the Invesco QQQ basket, have as reference the exact same sectors of the Nasdaq-100, but they exclude the complex branch of finance. In fact we can find different categories such as: Healthcare, Technology, Industry, Telecommunications, and many more.
Composition
Specifically, within the Invesco QQQ, we come across some of the biggest names of the overseas BIGs, such as: Nvidia, Apple, Tesla, Amazon, Facebook, Microsoft, Netflix, and PayPal. Seeing this list, we can begin to understand why the Invesco QQQ ETF has managed to reach over $160 billion in assets under management today. With virtually no competitors in terms of stock composition and value, it’s only natural that the trends surrounding this ETF have been, and still are, among the fastest growing in recent years, especially in the last decade.
Listing and Returns
If we take into consideration some temporal steps, through the use of the chart, we can immediately notice that the Invesco QQQ has led in a constant and linear way, a continuous upward movement. If we take 2010 as a reference point, for example, its value was about 42 points, passing then to 2015 with 101 points, up to its maximum value recorded in January 2022, of 363 points. Impressive numbers, which justify the great resonance that this ETF has always brought with it, offering great opportunities for gain to its investors.
How to invest in ETF Invesco QQQ
In order to decide whether to include the Invesco QQQ in your portfolio, you must first understand whether to rely on a bank, a brokerage firm, or an online trading platform, through which you can opt for trading both short and long term.
Among the best platforms available on the market today, we can mention eToro. Initially created by its founders as an interesting project of social trading, over time has established itself among the major players in the world, being able to have today one of the most important community, and thousands of users who make transactions daily, taking full advantage of all the potential made available by the platform.
Among the many advantages that the platform offers, you will find zero commission charges and no ticket or additional management costs, real informative tutorials on the financial world, and very low spreads. You can make transactions from any device that has an active internet connection, and supports the main interface systems, or decide to directly download the dedicated App, available for both iOS and Android devices.
In addition, it also offers the possibility of using a free Digital Demo, a virtual test platform, identical to the original, where you can invest virtual money, so you can practice before investing real capital.
Advantages and Risks of Investment: Is it worth it?
Like any other type of financial operation and investment, it must be said that no operation will ever be able to guarantee a 100% secure gain, since the market undergoes continuous fluctuations based on various factors, very often they are also of an extra-financial nature. Having said that, the Invesco QQQ ETF is one of the best assets of the financial market, with really interesting growth trends that deserve without any doubt, a careful consideration.