**What is QQQ?**

QQQ is an Exchange-Traded Fund (ETF) that tracks the Nasdaq-100 Index. It has grown to become one of the top five largest ETFs in the world, with a primary focus on technology stocks.

| ETF Name | Invesco Nasdaq-100 Index ETF |
| -------- | -------- |
| Ticker Symbol | QQQ |
|Tracking Index |Nasdaq-100 Index|
|Inception Date|March 10, 1999|
|ETF Size (as of June 28, 2024)|$286.6 billion|
|Total Expense Ratio|0.2%|
|Number of Holdings|103|
|Weighting Method|Market Capitalization-Weighted|

**Historical Background of QQQ**

In 1971, the Nasdaq Stock Exchange was established as the first electronic exchange in the United States, marking a major financial application of computer technology. Because Nasdaq was synonymous with technology and innovation at the time, many tech companies chose to list on the Nasdaq rather than the New York Stock Exchange (NYSE). As a result, the Nasdaq Stock Exchange became heavily dominated by technology stocks.

In the same year, the Nasdaq Composite Index was created, starting with a base value of 100, representing all companies listed on the Nasdaq. However, as the number of companies on Nasdaq grew, it became more diverse, and the idea emerged to create a new index comprising the largest companies on Nasdaq. This led to the creation of the Nasdaq-100 Index in 1985. In 1999, QQQ, the ETF that tracks the Nasdaq-100 Index, was officially launched.

Over the years, as more investors joined and the Nasdaq-100 Index performed well, QQQ has seen significant growth. Since its inception 25 years ago, QQQ has risen approximately 12 times in value. With its increasing popularity and consistent price growth, QQQ has become one of the top five largest ETFs globally, with assets under management reaching around $290 billion by the end of June 2024. It is known for providing strong returns.

**QQQ ETF Components**

QQQ tracks the top 100 companies listed on the Nasdaq Stock Exchange. Below is a list of the top 10 companies currently in the index, along with their respective weightings. This data is for reference only.

Source：[TradingKey](https://www.tradingkey.com/)

From this data, it is clear that the U.S. stock market exhibits a significant concentration effect, where the top 10 companies account for more than half of the total market capitalization. This "winner-takes-all" trend is especially pronounced in the AI era, where smaller companies may struggle to keep up due to a lack of capital and data for ongoing investment. This could lead to an even wider gap between small and large companies in the future.

To address this issue, a "special rebalance" was implemented on July 24, 2023, to reduce the overweighting of the largest companies. This adjustment ensures that the total weight of the top five stocks remains below 40%. It’s important to note that similar adjustments have been made in the past, specifically in 1998 and 2011.

Although the Nasdaq Index is dominated by technology stocks, it is not exclusively composed of tech companies. For example, Costco (COST) is part of the retail sector, not the technology sector, which indicates a certain level of industry diversity within the index.
QQQ Selection Process

QQQ tracks the Nasdaq-100 Index, which ranks companies based on their market capitalization on the Nasdaq Stock Exchange. The index is rebalanced quarterly, and the holdings are updated annually.

A notable recent adjustment occurred on July 24, 2023, when a "special rebalance" was conducted to address the issue of excessive weightings in the largest companies. This adjustment ensured that the combined weight of the top five stocks remained below 40%. Similar adjustments were made in 1998 and 2011, primarily to prevent the ETF's holdings from becoming too concentrated.

**QQQ Dividends**

QQQ distributes dividends once every quarter. Due to the increased profitability of the companies held within the fund, the per-unit dividend payout for QQQ has also risen. However, because the net asset value (NAV) of QQQ has increased at an even faster rate, the yield has actually decreased.