Should Invesco NASDAQ 100 ETF (QQQM) Be on Your Investing Radar?

If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Invesco NASDAQ 100 ETF (QQQM), a passively managed exchange traded fund launched on October 13, 2020.

The fund is sponsored by Invesco. It has amassed assets over $104.37 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.

Why Large Cap Growth

Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.44%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector -- about 57.5% of the portfolio. Telecom and Consumer Discretionary round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 8.56% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).

The top 10 holdings account for about 45.71% of total assets under management.

Performance and Risk

QQQM seeks to match the performance of the NASDAQ-100 INDEX before fees and expenses. The NASDAQ-100 Index includes securities of 100 of the largest domestic and international nonfinancial companies listed on Nasdaq.

The ETF return is roughly 16.98% so far this year and was up about 26.27% in the last one year (as of 09/01/2026). In the past 52-week period, it has traded between $229.87 and $307.23.

The ETF has a beta of 1.23 and standard deviation of 19.93% for the trailing three-year period. With about 108 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco NASDAQ 100 ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, QQQM is an outstanding option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard Morningstar Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Morningstar Growth ETF has $227.08 billion in assets, Invesco QQQ has $486.11 billion. VUG has an expense ratio of 0.03% and QQQ charges 0.18%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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This article originally published on Zacks Investment Research (zacks.com).

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