MARKET OUTLOOK

How QQQ can fit into your portfolio

22 January 2026
Invesco
artist considering how to complete a painting like an investor wondering how qqq can fit into a portfolio

    • The Trust seeks to track the investment results, before fees and expenses, of the Nasdaq-100 Index (“Index”).
    • Investors should note the equity market risk, concentration risk of investing in the US market and in companies in the technology sector, technology sector risks, passive investment risk, trading risks, trading hours different risk, foreign exchange risks, multi-counter risks, reliance on market maker risks, termination risk and general investment risk.
    • The Trust may be subject to tracking error risk, which is the risk that its performance may not track that of the Index exactly.
    • Payment of distributions out of capital or effectively out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment and may result in an immediate reduction in the Net Asset Value (“NAV”) per share of the Trust (“Share”).
    • All Shares will receive distributions in the base currency (USD) only. In the event that a Trust Shareholder has no USD account, the Trust Shareholder may have to bear the fees and charges associated with the conversion of such distributions from USD to HKD or RMB or any other currency.
    • NAV and trading price of the Shares can be volatile and could go down substantially.
    • Investors should not base their investment decision on this material alone.
Key takeaways
  • QQQ provides diversified exposure to the 100 largest nonfinancial companies listed on the Nasdaq, offering investors access to market-leading growth companies without individual stock selection.
  • The fund has historically outperformed the S&P 500 but comes with higher volatility and a focus on the Information Technology sector.1
  • QQQ may serve multiple portfolio roles from large-cap growth allocation to thematic investing, making it something investors with long-term horizons who can tolerate increased price fluctuations might want to consider.

Invesco QQQ ETF is often chosen by investors seeking exposure to leading growth companies.

This article explores QQQ’s potential benefits and how it can be strategically integrated into investment portfolios, highlighting its features, practical applications, and considerations for different investor types.

Why consider QQQ?

In a nutshell, QQQ offers exposure to the Nasdaq-100® Index, which contains the 100 largest nonfinancial companies listed on the Nasdaq. With a track record of more than 25 years and assets of $363.0 billion, QQQ is the fifth-largest ETF in the U.S. based on AUM.2

Over the past 10 years, QQQ has often outpaced the S&P 500® Index—a broad U.S. equity benchmark. This performance reflects its focus on innovative, market-leading companies.

QQQ has historically outperformed over the past decade

Source: Bloomberg L.P., 10yr performance as of 8/31/25.

Standardized performance - Fund performance shown at NAV. Performance quoted is past performance and cannot guarantee comparable future results; current performance may be higher or lower. Visit invesco-qqq.html for the most recent month-end performance. Investment returns and principal value will vary; you may have a gain or loss when you sell shares. Fund performance reflects fee waivers, absent which, performance data quoted would have been lower. Invesco QQQ’s total expense ratio is 0.20%. Index performance does not represent fund performance. Please keep in mind that high, double-digit and/or triple-digit returns are highly unusual and cannot be sustained.

How QQQ can be used in a portfolio

QQQ can serve multiple roles depending on investors’ investment strategy and risk tolerance.

  • Large-cap or core exposure: As a large-cap growth allocation, it provides exposure to established companies with strong growth potential. For investors seeking core equity exposure, QQQ offers a focused approach to market-leading firms.
  • Exposure to market leaders: QQQ’s holdings are dominated by influential companies like Apple, Microsoft, and Nvidia, with top sectors including Information Technology and Consumer Discretionary. These companies often drive market trends and potentially offer investors exposure to long-term structural growth trends.
  • Thematic exposure without stock picking: QQQ's focus on the Nasdaq-100 Index allows investors to access companies at the forefront of trends like artificial intelligence (AI) and digital transformation without the need to research and select individual stocks. This may be particularly valuable for investors who want exposure to technology-focused companies but prefer the diversification of an ETF structure.
Key considerations and trade-offs

While QQQ's focus on innovation and market-leading companies offers compelling growth potential, it's important to understand the trade-offs that come with this approach.

  • Higher potential volatility: Although QQQ has outperformed the S&P 500 Index over the past 10 years, it was more volatile.3 A long-term strategy may help, as staying invested may help mitigate short-term volatility and benefit from the companies’ potential sustained growth.
  • Tech sector focus: Investors should be aware QQQ had 62.42%4 of its portfolio in the Information Technology sector, in part because its tracking index follows the 100 largest nonfinancial companies on the Nasdaq, home to some of the world’s largest innovative tech leaders.
The bottom line

QQQ may be an attractive vehicle for investors seeking exposure to leading growth companies and innovation trends. And it can be a versatile portfolio addition for large-cap growth, core equity exposure, or thematic investing without stock selection.

As always, though, investors should carefully consider their investment goals and risk tolerance. QQQ’s historical volatility means investors should be prepared for price swings. A long-term investment horizon can help ride out volatility while potentially benefiting from innovative companies' growth.

 

  • 1

    Based on cumulative NAV performance.
  • 2

    Bloomberg L.P. as of 8/31/25.
  • 3

    Based on cumulative NAV performance.
  • 4

    Bloomberg L.P. as of 8/31/25.

  • All returns are based off NAV. Returns are cumulative unless otherwise noted.

    This does not constitute a recommendation of any investment strategy or product for a particular investor.

    The opinions expressed are those of the authors, are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.

    There are risks involved with investing in ETFs, including possible loss of money. ETFs are subject to risks similar to those of stocks.

    Investment involves risks. The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested. Past performance is not indicative of future performance.

    There are risks involved with investing in Exchange-traded Funds (“ETFs”), including possible loss of money. Index-based ETFs are not actively managed, and the return of index-based ETFs may not match the return of the Underlying index. Actively managed ETFs do not necessarily seek to replicate the performance of a specific index. Both index-based and actively managed ETFs are subject to risks similar to those of stocks, including those related to short selling and margin maintenance requirements. Ordinary brokerage commissions apply. Equity risk is the risk that the value of equity securities, including common stocks, may fail due to both changes in general economic and political conditions that impact the market as a whole, as well as factors that directly related to a specific company or its industry.

    Investments focused in a particular sector, such as technology, are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments.

    The Nasdaq-100® Index comprises the 100 largest non-financial companies traded on the Nasdaq. An investor cannot invest directly in an index.

    The sponsor and adviser of the Invesco QQQ TrustSM, a trust, is Invesco Capital Management LLC. NASDAQ, Nasdaq-100 Index, Nasdaq-100 Index Tracking Stock and QQQ are trade/service marks of The Nasdaq Stock Market, Inc. and have been licensed for use by Invesco, QQQ's sponsor. NASDAQ makes no representation regarding the advisability of investing in QQQ and makes no warranty and bears no liability with respect to QQQ, the Nasdaq-100 Index, its use or any data included therein.

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