From Kiplinger · · 1m
QQQ Outperforms SPY with $12,000 Gain
QQQ's 16.1% annualized return over 20 years beats SPY's 11% but comes with higher risk.
In brief
QQQ's 16.1% annualized return over 20 years beats SPY's 11% but comes with higher risk. QQQ grew $1,000 to $20,000 in 20 years versus SPY's $8,000, but QQQ dropped 36% when interest rates rose. Originally reported by Kiplinger.
QQQ's Tech Focus
The Invesco QQQ Trust holds the 100 largest nonfinancial stocks on Nasdaq.
QQQ's Top Holdings
Nvidia, Apple, Microsoft, Micron Technology and Amazon.com make up 30% of QQQ's assets.
QQQ vs SPY Performance
QQQ grew $1,000 to $20,000 in 20 years versus SPY's $8,000, with 16.1% annualized return.
Risk Premium
QQQ dropped 36% when interest rates rose, while SPY fell 25%.
Tech Dominance
Technology and communications stocks account for almost 48% of the S&P 500.
Financial Sector Weakness
Financial stocks make up 12% of the S&P 500, but QQQ excludes them.
Risk Warning
QQQ's outperformance comes with higher risk, especially if AI leads to a market bubble burst.
The takeaway
QQQ grew $1,000 to $20,000 in 20 years versus SPY's $8,000, but QQQ dropped 36% when interest rates rose.
