How Does Invesco QQQ Fit Into Your Portfolio?

For investors looking for unique, differentiated options within their large-cap growth buckets, Invesco QQQ should be considered. See why.

Blog Author

John Frank, CFA

Talking Points

1

Growth investing includes buying companies that are expected to grow sales, profits or cash flows faster than other companies.

2

Since 2008, Invesco QQQ’s underlying index, the Nasdaq-100 has generated higher growth rates than competing indexes.

Diversification is key for any portfolio. One part of the portfolio that typically gets overlooked is large-cap growth allocation. International, value and small-cap allocations are all important aspects of a portfolio — but they can garner so much attention that maintaining a suitable large-cap growth investment can become an afterthought.

Large-cap investing refers to investing in companies that are larger in size, typically measured by the market capitalization (“market cap”) of the company. The company’s market cap is simply the shares available to trade multiplied by their price. Larger companies, typically referred to as blue chip, traditionally are more global in nature, offer more diverse product offerings and come under a higher level of investor scrutiny.

Growth investing includes buying companies that are expected to grow sales, profits or cash flows faster than other companies. Typically these companies are focused on investing in themselves to expand and innovating new ways grow their business. This might mean hiring more employees, buying more equipment or conducting more research and development. For those who need to evaluate their large - cap growth allocation, you may want to consider Invesco QQQ.This large - cap growth ETF provides exposure to large, global growth companies through its underlying index, the Nasdaq - 100. Since 2008, the Nasdaq - 100 has generated higher growth rates across revenue, earnings and dividends than both the S & P 500 Index and the Russell 1000 Growth Index.

Source: Bloomberg, L.P., Dec. 31, 2007 through Dec. 31, 2017. Performance data quoted represents past performance and does not guarantee future results. An investment cannot be made in an index. Index returns do not represent fund returns.

The companies within the Nasdaq-100 Index, Invesco QQQ’s underlying index, have shown higher levels of historic growth rates that we believe has resulted in Invesco QQQ’s outperformance against industry benchmarks such as the S&P 500 and Russell 1000 Growth indexes.1 For investors looking for unique, differentiated options within their large-cap growth buckets, Invesco QQQ should be considered.

1 Source: Bloomberg L.P., as of Dec. 31, 2018. For the past ten years, the Invesco QQQ ETF based on NAV return (19.05%) has outperformed the S&P 500 (13.10%) and Russell 1000 Growth Index(15.28 % ).

See standardized performance. Performance quoted is past performance and cannot guarantee of comparable future results; current performance may be higher or lower. Visit invesco.com/performance 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. Market returns are based on the midpoint of the bid/ask spread at 4 p.m. ET and do not represent the returns an investor would receive if shares were traded at other times. Fund performance reflects fee waivers, absent which, performance data quoted would have been lower.

Important Information Disclosure
The Nasdaq-100 Index comprises the 100 largest non-financial companies traded on the Nasdaq. The Russell 1000® Growth Index, a trademark/service mark of the Frank Russell Co.®, is an unmanaged index considered representative of large-cap growth stocks. 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. Diversification does not guarantee a profit or eliminate the risk of loss.

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