PowerShares Changes Ticker Symbol of Tech-Heavy QQQ ETF
One of the most heavily traded ETFs on the market gets its ticker symbol streamlined.
One of the most heavily traded ETFs on the market gets its ticker symbol streamlined.
Invesco PowerShares today changed the ticker symbol of its widely traded, tech-heavy exchange-traded fund PowerShares QQQ to QQQ from QQQQ.
Known as the "Cubes," the "Qubes" or the "Qs," the ETF is one of the most heavily traded securities on the planet and is the fourth most actively traded ETF around. The fund tracks the modified market-cap-weighted Nasdaq-100 Index, which contains the Nasdaq Composite Index's 100 largest nonfinancial stocks by market capitalization.
As such, the ETF, which trades more than 60 million shares a day, is known most for its exposure to large technology companies, which make up about 64% of assets. Investors also can use QQQ for a big helping of other kinds of large-cap growth stocks as well, including leading consumer discretionary and biotech firms, which make up 16% and 13% of the ETF, respectively.
Launched in March 1999, the fund originally was listed on the Amex Stock Exchange with the ticker symbol QQQ. When the fund was moved to the Nasdaq in December 2004, it was assigned the ticker QQQQ because all Nasdaq-listed securities were required to have four-letter symbols.
Now, with Nasdaq-listed securities permitted to have three-letter symbols, PowerShares has made the decision to change the ETF's symbol back to QQQ. The fund will continue to trade on the Nasdaq.
Investors should note that there is a very high correlation in performance between PowerShares QQQ and SPDR S&P 500 (SPY), even though there is little overlap between the two funds' underlying indexes.
Also, Apple (AAPL) far and away is the largest holding in PowerShares QQQ, at almost 21% of assets, followed by Qualcomm (QCOM), Google (GOOG), and Microsoft (MSFT). The reason for this is that when the Nasdaq-100 Index was created, Microsoft was such a large part of the index that the Nasdaq made the decision to forcibly lower Microsoft's weighting. Since that time, of course, Apple has grown rapidly and now has a market cap of $309.9 billion, compared with Microsoft's $212.5 billion.
No matter how large Apple gets, however, it is limited from becoming much larger a percentage of QQQ. The reason is that the Nasdaq caps any one company in the index at 24%. If a company were to become larger than that, Nasdaq would then rebalance the index, keeping the largest holding at 24% and redistributing the excess to the index's other constituents.
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