I’m Keith DeGreen and this is your Investors Minute.
A very popular exchange-traded fund – an ETF – the PowerShares QQQ Trust Series – ticker QQQ — is widely believed to track all 2500 stocks represented in the NASDAQ Composite Index. But it doesn’t do that.
The key is “market capitalization”. QQQ tracks the price performance of ONLY the 100 largest companies in the NASDAQ. It makes no attempt to track the remaining companies!
Therefore, QQQ owns a bunch of very big companies — Apple, Microsoft, Google…you get the idea – and large-cap companies have done well this year.
That’s why year-to-date, the NASDAQ index is up about 7%. But triple Q is up nearly 12%.
The moral? As always — do your homework, and seek qualified help.
I’m Keith DeGreen, and this has been your Investors Minute.
FEE-ONLY DeGreen Capital Management. Pioneers in low-cost exchange-traded fund investing. Irvine: 949-333-4550. Scottsdale: 480-609-9900. www.DeGreen.com. Minimum portfolio requirement $1,000,000.
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