The following are remarks from Ryan McCormack, senior factor and core equity ETF strategist at Invesco. They have been lightly edited for clarity and length.
The Nasdaq-100 Index, which Invesco QQQ ETF tracks, is a true gauge of the modern economy because its constituents have a demonstrated ability to be nimble and adapt to shifting trends in the market. Here are three reasons why investors looking for exposure to some of the world’s innovative companies should consider access to the Nasdaq-100 through Invesco QQQ, which debuted in March 1999.
1. It’s The Benchmark To Beat
The Nasdaq-100’s focus on disruptive companies has helped drive a cumulative total return of 726% since 2008.1 Other factors behind this strong performance include the contributions of innovative technology stocks over the past decade, particularly the tech bellwethers. It’s important to remember that the benchmark is much more than just a technology index. The Nasdaq-100 and Invesco QQQ include companies from other sectors, such as consumer products and healthcare, that are transforming their respective industries to help drive growth. After all, the technology sector doesn’t have a monopoly on innovation.
2. It’s Where Innovation Lives
Some of the most innovative companies in the world, particularly in Silicon Valley, have opted to list their stock on the Nasdaq, a trend that doesn’t seem destined to end anytime soon. The Nasdaq is associated with innovation and many cutting-edge companies. As a result, it’s not surprising that many firms want to align their brands with the innovative stamp of Nasdaq, which introduced the world’s first electronic trading platform in 1971. Invesco QQQ, which celebrates its 25th anniversary in March, provides exposure to the 100 largest non-financial companies listed on the Nasdaq.
3. It’s The Index Of The Future
Nasdaq-100 companies are known for innovation and commitment to research and development spending. Investors may want to check if their index truly reflects where the world appears to be headed. Think about artificial intelligence (AI), cybersecurity, blockchain, cloud computing and other disruptive technologies; the Nasdaq-100 contains many companies pushing the boundaries in these cutting-edge areas. The transparent, rules-based inclusion methodology of the Nasdaq-100 may also appeal to some investors. The stocks in certain equity benchmarks are selected by an index committee, which introduces the potential for human error and biases. When evaluating where to add growth, ask yourself if it looks backward to the old economy or forward to the companies poised to shape our high-tech future.