QQQ

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1. Starting Point: What Is an Index?

Before learning about QQQ, it helps to understand what an index is.

An index is a list of companies grouped together so people can see how that group is doing.

Examples of indexes:

• S&P 500 – biggest 500 companies in the U.S.
• Dow Jones – 30 major companies
• NASDAQ-100 – the 100 biggest non-financial companies on the NASDAQ exchange

Indexes are like scoreboards. They don’t buy or sell anything—they just show how companies are performing.

Click HERE to learn more about indexes.

2. What Is the NASDAQ?

The NASDAQ is a stock exchange where many technology companies are listed.

It is known for companies such as:

• Apple
• Microsoft
• NVIDIA
• Amazon
• Google
• Meta

The index connected to it is called the NASDAQ-100, which includes the 100 largest non-financial companies on the NASDAQ.

This index is very tech-heavy.

3. What Is QQQ?

Now that you know what an index is and what the NASDAQ-100 is, we can explain QQQ.

QQQ is an index fund that follows the NASDAQ-100.

This means:

• The NASDAQ-100 creates the list of companies
• QQQ buys those same companies
• QQQ tries to match the performance of the NASDAQ-100

So:

Buying QQQ = owning tiny pieces of the 100 biggest technology-focused companies on the NASDAQ.

It is one of the easiest ways to invest in top tech companies all at once.

4. Why People Care About QQQ

QQQ is popular because technology has grown very quickly.
The fund automatically keeps the strongest companies and removes weaker ones.

It includes famous companies such as:

• Apple
• Microsoft
• NVIDIA
• Amazon
• Google
• Meta

These companies grow fast, make new inventions, and shape the future.

That is why QQQ has grown faster than many other index funds.

5. How QQQ Has Performed Over Time

QQQ began in 1999.

Approximate price growth:

• 1999: about $50
• 2025: about $490

That is almost 10 times growth.

Long-term performance:

• Since 1999: about 11 percent per year
• Last 15 years: about 17 percent per year
• Last 10 years: about 17–20 percent per year
• Last 5 years: about 18–22 percent per year

The main reason is that the technology sector has expanded quickly.

6. Why QQQ Grows Fast

  1. Technology grows quickly.
    Many tech companies expand faster than the overall market.

  2. QQQ only keeps the winners.
    When a company becomes successful, it stays.
    If it falls behind, QQQ removes it.

  3. No financial companies included.
    This makes QQQ more focused on growth instead of banks or insurance.

  4. Easy to own.
    One share gives you small pieces of 100 companies.

7. Downsides of QQQ

QQQ is strong but also risky.

• It goes up and down more than safer funds
• It relies heavily on the technology sector
• It can fall fast when interest rates rise
• It pays very low dividends (so the goal is long-term growth)

This means QQQ can grow a lot in good times, but drop sharply in bad times.

8. Final Summary

• The NASDAQ is a stock exchange full of tech companies.
• The NASDAQ-100 is an index of the top 100 non-financial companies on it.
• QQQ is an index fund that copies that list.
• Buying QQQ gives you tiny pieces of many successful tech companies.
• QQQ has grown very fast because tech has grown fast.
• It is powerful for long-term growth but can be more volatile than safer funds.

FAQs

  • The NASDAQ is the stock exchange where companies are listed and traded.
    The NASDAQ-100 is an index that includes the 100 largest non-financial companies on that exchange.
    QQQ follows the NASDAQ-100, not the entire NASDAQ.

  • No.
    QQQ only includes the top 100 non-financial companies, not all companies. There are thousands of companies on the NASDAQ, but QQQ focuses on the biggest and strongest.

  • QQQ is an ETF (exchange-traded fund) that tracks an index.
    So, it is both:
    • It is an ETF because you can buy and sell it like a stock.
    • It is an index fund because it follows the NASDAQ-100.

  • SPY includes 500 companies across many industries.
    QQQ includes only 100 companies and is mostly technology.
    This makes QQQ less diversified and more sensitive to things like interest rates and tech market swings.

  • Yes, but very small ones.
    Most companies in QQQ spend money on creating new technology rather than paying dividends, so QQQ’s payouts are low compared to other funds.

  • It depends on the person.
    • QQQ can grow fast over long periods.
    • But it can also drop quickly.
    Beginners often combine a safer fund like SPY with QQQ to balance stability and growth.

  • It gets removed from the NASDAQ-100 index, and QQQ removes it too.
    Then a stronger company gets added.
    This automatic updating helps QQQ stay focused on the best performers.

  • Yes.
    Because QQQ is tech-heavy, it can fall sharply when the tech sector has problems, when interest rates rise, or when investors move away from growth stocks.
    This happened in 2000 (dot-com crash) and again in 2022.

  • They own tiny fractions of all the companies inside the NASDAQ-100 index.
    It is not buying each company directly, but QQQ gives you a small slice of all of them at the same time.