Is QQQ an index fund or ETF?
The Invesco QQQ ETF is an exchange-traded fund (ETF) that tracks the
The QQQ gained 18.1% annually over the past 10 years. That tops all of the nearly 300 ETFs in the category. That easily outpaces the 12.6% average annual gain of the SPDR S&P 500 ETF Trust (SPY) — the cornerstone of most investors' portfolios.
Index funds can be an excellent option for beginners stepping into the investment world. They are a simple, cost-effective way to hold a broad range of stocks or bonds that mimic a specific benchmark index, meaning they are diversified.
There are some key differences that you need to recognize when investing in these two ETFs. First, VOO has a clear advantage in terms of expense ratio. VOO's expense ratio is 0.03% compared to 0.20% of QQQ, which is more than three times cheaper. Next is diversification.
The Vanguard 500 Index Fund (VFIAX) is one of the best index funds tracking the S&P 500 index. The Invesco NASDAQ 100 ETF (QQQM) is among the best ETFs for the Nasdaq-100 index.
Both ETFs and index mutual funds are pooled investment vehicles that are passively managed. The key difference between them (discussed below) is that ETFs can be bought and sold on the stock exchange (just like individual stocks)—and index mutual funds cannot.
In the last 30 Years, the Invesco QQQ Trust (QQQ) ETF obtained a 14.30% compound annual return, with a 23.97% standard deviation.
Invesco QQQ Stock Forecast 2026-2030
These five years would bring an increase: Invesco QQQ price would move from $600 to $975, which is up 63%. Invesco QQQ will start 2026 at $600, then soar to $624 within the first six months of the year and finish 2026 at $667. That means +52% from today.
Calculate your return
Invesco QQQ Market Price: YTD: 54.85%; 1YR: 54.85%; 3YR: 9.98%; 5YR: 22.40%; 10YR: 17.66%; Since Inception: 9.44%.
In 2020, Buffett said that “for most people, the best thing to do is to own the S&P 500 index fund, adding “People will try to sell you other things because there's more money in it for them if they do.” This no-frills investment strategy is one of the best for ensuring long-term, low-cost gains.
Is it OK to only invest in index funds?
If you're new to investing, you can absolutely start off by buying index funds alone as you learn more about how to choose the right stocks. But as your knowledge grows, you may want to branch out and add different companies to your portfolio that you feel align well with your personal risk tolerance and goals.
While indexes may be low cost and diversified, they prevent seizing opportunities elsewhere. Moreover, indexes do not provide protection from market corrections and crashes when an investor has a lot of exposure to stock index funds.
XLK has outperformed QQQ on a three-year basis, with a three-year annualized return of 13.4%. It has also beaten QQQ over the past five years, with an annualized return of 19.6%.
The Invesco QQQ Trust is made up of the 100 largest non-financial Nasdaq stocks, and the index is dominated by the Magnificent Seven stocks right now. All of those stocks were big winners, and their gains reflect the trends that pushed the QQQ to huge gains.
Invesco QQQ (QQQ) has a higher volatility of 3.98% compared to SPDR S&P 500 ETF (SPY) at 3.16%. This indicates that QQQ's price experiences larger fluctuations and is considered to be riskier than SPY based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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- Motilal Oswal Nifty 500 Index Fund Direct - Growth. ...
- ICICI Prudential Nifty 100 Low Volatility 30 ETF FOF Direct - Growth.
Market exposure: The most popular index is the S&P 500 index, but index funds track dozens of other indexes. Choose an index that offers the market exposure you want, then focus on funds that track the index.
Alternative: Invesco Nasdaq 100 ETF (QQQM)
QQQM is the lower cost version of QQQ, coming in with an expense ratio of 0.15% versus 0.20% for QQQ. It's had a bit of a slower build as well, but it's now over $13 billion in assets, making liquidity a non-issue and a better alternative to the tech giant ETF.
You may be able to find an index mutual fund with lower costs than a comparable ETF. Similar ETFs are thinly traded. As we covered earlier, infrequently traded ETFs could have wide bid/ask spreads, meaning the cost of trading shares of the ETF could be high.
ETF: An Overview. Exchange-traded funds (ETFs) and index funds are similar in many ways but ETFs are considered to be more convenient to enter or exit. They can be traded more easily than index funds and traditional mutual funds, similar to how common stocks are traded on a stock exchange.
Is it better to buy index or ETF?
If you buy and sell frequently, ETFs are the clear winner when it comes to taxes. When shares of an ETF are sold, only the seller pays capital gains taxes. That's different from index mutual funds because you sell these shares to a fund manager.
QQQ Dividend Information
QQQ has a dividend yield of 0.62% and paid $2.64 per share in the past year. The dividend is paid every three months and the last ex-dividend date was Mar 18, 2024.
- Invesco (QQQ) ...
- Invesco Nasdaq 100 ETF (QQQM) ...
- Fidelity Nasdaq Composite Index ETF (ONEQ) ...
- Direxion Nasdaq-100 Equal Weighted Index Shares (QQQE) ...
- Invesco Nasdaq Next Gen 100 ETF (QQQJ)
QQQ is considered an aggressive growth investment, with higher short-term volatility than the S&P 500, which invests in companies in a more evenly distributed range of industries.
According to TipRanks' unique ETF analyst consensus, determined based on a weighted average of its holdings' analyst ratings, QQQ is a Moderate Buy. The Street's average price target of $482.89 implies an upside of about 8.4%.
