Understanding QQQ’s performance through market cycles

In the world of investing, few vehicles have captured the imagination—and portfolios—of growth-focused investors like the Invesco QQQ ETF (QQQ).

Despite periods of market turbulence, QQQ has remained a popular choice among investors seeking exposure to innovative, growth-oriented companies within the Nasdaq-100® Index. Many investors have continued to turn to QQQ—which tracks the Nasdaq-100 Index—not only for its technology exposure, but also for the innovation-driven companies helping shape the future of the economy.

While past performance doesn’t guarantee future results, understanding what has helped drive QQQ’s returns—and how investors might think about its role moving forward—is key.

QQQ’s track record: Resilience through the years

Since its inception in March 1999, QQQ’s long-term track record has likely held a strong place in many growth-oriented portfolios.

For the 15-year period ended June 30, 2025, QQQ has delivered an annualized total price return of 19.64%, according to Morningstar. In the large-cap growth category, QQQ’s return places the ETF in the top 1 percentile rank (1 of 385) among funds in the category over the past 15 years according to Lipper, as of June 30, 2025, based on total return.¹

Additionally, QQQ has beaten the S&P 500 Index seven out of the last 10 years as of June 30, 2025.² The 10-year cumulative return for Invesco QQQ is 456.39%, meaning $10,000 invested in Invesco QQQ 10 years ago would be worth $55,639 today.³

Standardized Performance. Fund performance is cumulative and shown at NAV. An investor cannot invest directly in an index. Index returns do not represent Fund returns. Performance data quoted represents past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than performance data quoted. Invesco QQQ’s total expense ratio is 0.20%.

Of course, that does not mean QQQ hasn’t suffered down years, and may continue to do so in the future. This is just the nature of investing in the stock market, particularly growth stocks that can see relatively higher volatility.

For example, according to Morningstar, QQQ lost 32.58% in 2022.⁴ This was the same year in which the Federal Reserve raised rates aggressively to combat inflation and Russia’s invasion of Ukraine created geopolitical uncertainty. While a reminder that all investments carry risk, QQQ has remained a widely used tool for many investors with a long-term, buy-and-hold approach seeking exposure to innovative companies.

What has driven QQQ’s long-term returns?

The Nasdaq-100 Index’s engine is driven by innovation. QQQ provides access to industry leaders in artificial intelligence (AI), cloud computing, cybersecurity, digital advertising, e-commerce, and beyond.

Looking at QQQ’s current holdings, Nvidia’s graphics processing units (GPUs) are pivotal to AI, Amazon is dominant in e-commerce, and Tesla’s autonomous vehicle advancements have helped amplify industry growth. These firms strive to boast strong balance sheets, high research and development spending, and competitive moats, helping enable them to capture market share over decades.

In addition, the Nasdaq-100 employs regular rebalancing, allowing the index to maintain exposure to some of the rising stars in innovation while phasing out companies that are losing relevance in the industry.

The index’s adaptability is key. Once dominated by dot-com era stalwarts like Cisco, the Nasdaq-100 now features diversified giants like Alphabet and Costco, helping to ensure relevance across economic shifts. For investors, QQQ offers a front-row seat to this innovation wave, democratizing access to companies reshaping how we live, work, and connect.

QQQ vs. the alternatives

How does QQQ compare to other related investment strategies?

• Versus the S&P 500: QQQ offers more concentrated exposure to tech and communication services, which has led to historically higher returns—but also greater volatility.
• Versus large-cap growth ETF strategies: QQQ includes many of the market's leading tech and growth-oriented companies, while excluding the financial sector.
• Versus sector ETFs: Tech or communication-specific ETFs may be more volatile and may lack the diversification QQQ offers through additional exposure to consumer discretionary, healthcare, industrials, and other sectors.

For investors seeking targeted exposure to large-cap innovation leaders, QQQ may offer a compelling blend of thematic alignment and diversified structure.

Key takeaways for investors

• Long-term outperformance: QQQ has often outpaced the S&P 500 over multi-year periods.
• Innovation advantage potential: The Nasdaq-100’s patent-driven companies offer exposure to secular growth themes.
• Risk and reward: Volatility is part of the journey—but so is the potential for strong recovery and, hopefully, compounding returns.
• Portfolio role: QQQ can serve as a core growth holding or as a satellite allocation within a diversified strategy.

As investors weigh their options in today’s evolving market environment, QQQ could be a vehicle for those who believe in the long arc of innovation and the power of perseverance through market cycles.