How QQQ Works, What It Holds and How It Has Behaved Since 1999
QQQ, the Invesco QQQ Trust, is an exchange-traded fund that holds the stocks of the Nasdaq-100 Index at their index weights. It began trading on 10 March 1999, charges 0.18% a year and pays a small dividend every quarter. From launch to 30 September 2026, it returned 10.88% a year at NAV, and 20.91% a year over the latest 10 years.
Those two numbers tell QQQ’s whole story. The 10-year figure is outstanding, but the since-launch figure is far lower because the Nasdaq-100 fell about 83% from March 2000 to October 2002 and did not close above its old record again until November 2015. On 30 September 2026, 10 companies made up 46.68% of the fund, and technology was 68.0% of the index.
QQQ’s best years are the ones everyone quotes. Its worst years are the ones that decide whether you stay invested long enough to see the next good one. FRC’s research-driven How to Invest in QQQ course takes you through both, from Invesco’s own SEC filings and Nasdaq’s published rules, so you own QQQ knowing exactly what you have signed up for.
Visit the course page, watch the short video and see whether it fits what you want from your money. Nobody needs a finance degree to take it; the course is open to anyone who invests or wants to.
QQQ at a Glance
| Item | Figure | As Of |
|---|---|---|
| Full name | Invesco QQQ Trust, Series 1 | — |
| Index | Nasdaq-100 | — |
| Began trading | 10 March 1999 | — |
| Structure | Open-end fund since 22 December 2025 (previously a unit investment trust) | — |
| Expense ratio | 0.18% ($18 a year per $10,000) | Since 20 Dec 2025 |
| Net assets | $485.8 billion | 30 Jun 2026 |
| Top 10 holdings | 46.68% of the fund | 30 Sep 2026 |
| Technology (index’s own sector system) | 68.0% | 30 Sep 2026 |
| Total return at NAV since launch | 10.88% a year (Nasdaq-100: 11.11%) | To 30 Sep 2026 |
| Total return at NAV over 10 years | 20.91% a year | To 30 Sep 2026 |
| 30-day SEC yield | 0.42% | 11 Nov 2026 |
| Qualified share of dividends | 100% | Fiscal year to 30 Sep 2025 |
In plain terms, QQQ is a growth fund built on about 100 of the largest Nasdaq-listed companies, with almost no income and much bigger swings than the broad market.
How QQQ Works
QQQ uses full replication: it holds every stock in the Nasdaq-100 at its index weight and follows every index change. It is not actively managed, it sells no options and it uses no leverage.
For most of its life, QQQ was a unit investment trust, which fixed its rules, barred securities lending and held dividend cash until it was paid. After a shareholder vote approved on 19 December 2025, it became an open-end fund, trading as one from 22 December 2025. The name, ticker, index and holdings stayed the same, and the fee fell from 0.20% to 0.18% from 20 December 2025.
Invesco Capital Management is the adviser, and Nasdaq, Inc. owns the index. QQQ moved its listing from the American Stock Exchange to Nasdaq on 1 December 2004 and had a 2-for-1 share split on 20 March 2000, so prices from before that date are halved to compare them with today.
How the Nasdaq-100 Picks Its Companies
The Nasdaq-100 holds 100 of the largest non-financial companies listed on the Nasdaq Stock Market. On 31 October 2025, that meant 102 securities, because some companies have two share classes.
| Rule | What It Means |
|---|---|
| Listing | Primary listing on the Nasdaq Global Select or Global Market |
| Sector | No financial companies, no REITs and no SPACs |
| Size | No minimum or maximum: companies are ranked by market value |
| Caps | Rules limit how much any one company or the largest group can weigh |
| Reconstitution | Every December, with quarterly reviews in March, June and September |
| Fast Entry | Very large newcomers can join between reviews; SpaceX joined on 7 July 2026 |
The caps exist to keep funds that track the index within US tax diversification rules. They have forced special rebalances, most recently on 24 July 2023. QQQ follows every change automatically.
Spend a Little on Understanding Before You Commit a Lot to the Market
QQQ’s recent record makes it look like a fund that only goes up. From 2010 to 2019, it rose in nine of ten years. It returned 48.63% in 2020, 54.73% in 2023 and 25.58% in 2024.
The investors who get hurt are the ones who buy that record without the rest of it. $10,000 put into QQQ at its March 2000 peak fell to about $2,081 by the end of 2002 and did not get back above $10,000 until 2015. QQQ lost 41.68% in 2008 and 32.51% in 2022. Investors who sold in those years locked in the loss.
FRC’s How to Invest in QQQ course gives you the full record before you commit. Using Invesco’s SEC filings and Nasdaq’s methodology, you’ll see how the Nasdaq-100 picks and caps its companies, how QQQ’s holdings have changed since 1999, every year and every fall, every quarterly dividend, how it is taxed and how it compares with VOO, QQQM and JEPQ. You’ll finish with a written QQQ plan covering how much to hold and what you’ll do in a deep fall, and learners who pass the optional final exam receive an FRC Certificate of Completion. Spend a little on understanding before you commit a lot to the market.
QQQ also sits inside a wider portfolio. ETF Investing for Beginners shows you how to compare any ETF on cost, risk and return. ETF Investing Strategies shows you how to combine growth, income and bond funds, and Advanced ETF Investing takes you into concentration, after-tax returns and portfolio construction.
What QQQ Holds
QQQ has been concentrated since the day it launched. Its top 10 holdings have ranged between 39.51% and 56.26% of the fund on every date checked from 1999 to 2026.
| Date | Largest Holding | Top 10 Share |
|---|---|---|
| 5 Mar 1999 (launch) | Microsoft, 15.15% | 49.56% |
| 30 Sep 2000 | Cisco, 6.70% | 39.51% |
| 30 Sep 2020 | Apple, 13.42% | 56.26% |
| 30 Jun 2026 | NVIDIA, 7.60% | — |
| 30 Sep 2026 | — | 46.68% |
Microsoft is the only company in QQQ’s top 10 in all 10 snapshots from 1999 to 30 September 2026. Six of the launch top 10 were gone by 30 June 2026, including MCI WorldCom, Dell, Sun Microsystems and Yahoo!.
The index holds no financial companies, and 97.12% of the fund was in US companies on 30 September 2026. Even with about 100 holdings, the weights make it behave more like a portfolio of roughly 19 to 41 equal-sized holdings.
How QQQ Has Performed
The calendar years below are QQQ’s total returns at NAV, from its prospectuses.
| Year | QQQ | S&P 500 |
|---|---|---|
| 2008 | −41.68% | −37.00% |
| 2020 | 48.63% | 18.40% |
| 2022 | −32.51% | −18.11% |
| 2023 | 54.73% | 26.29% |
| 2024 | 25.58% | 25.02% |
| 2026 to 30 Sep | 20.85% | 12.75% |
From 2000 to 2024, QQQ had 19 up years and 6 down years: 2000, 2001, 2002, 2008, 2018 and 2022. The simple average was 12.08% a year, but the compound return was only 7.77% a year, because the deep falls cost so much to recover.
QQQ beat the S&P 500 in 10 of the 13 years from 2012 to 2024 and led it by 5.58 points a year over the 10 years to 30 September 2026. From launch to 31 December 2008, though, it returned −5.11% a year. Where you start decides what QQQ looks like. For every year in detail, see FRC’s QQQ performance history.
QQQ in Falling Markets
| Fall | What Happened | Recovery |
|---|---|---|
| 2000 to 2002 | Nasdaq-100 fell about 83%, from 4,705 on 27 March 2000 to 805 in October 2002 | The index first closed above its record on 3 November 2015 |
| 2008 | QQQ −41.68% | The index rose 78% from its low by the end of 2009 |
| 2020 | Nasdaq-100 fell 28% from 19 February to 23 March | New highs from late in the second quarter; QQQ +48.63% for the year |
| 2022 | QQQ −32.51% | Back above its end-2021 level by the end of 2023 |
| 2025 | Nasdaq-100 fell 23% to an 8 April low | It rose 36% by 31 July |
A fall of about 83% needs a gain of about 484% to recover. That arithmetic is why the 2000 to 2002 crash still weighs on QQQ’s since-launch return more than 20 years later.
What QQQ Pays
QQQ pays a dividend every quarter, from the dividends of the Nasdaq-100 companies minus the fund’s costs. It paid nothing in its first years, because costs exceeded income, and its first payment had an ex-date of 24 December 2003.
| Fiscal Year (to 30 Sep) | Dividends per Share |
|---|---|
| 2010 | $0.33 |
| 2015 | $1.15 |
| 2020 | $1.63 |
| 2024 | $3.04 |
| 2025 | $2.84 |
QQQ made 89 payments from December 2003 to the ex-date of 21 September 2026. Its yield has been under 1% in every fiscal year since 2017, and the 30-day SEC yield was 0.42% on 11 November 2026. QQQ is a growth fund: almost all of its return comes from the price, not the income.
What QQQ Has Meant in Dollars
The figures below are hypothetical back-tests built from QQQ’s published NAV total returns. They include the fee but leave out taxes and trading costs.
| Scenario | Result |
|---|---|
| $10,000 at launch, everything reinvested | About $4,802 at end 2002; about $142,528 by 31 Dec 2025; about $172,200 by 30 Sep 2026 |
| $10,000 at the March 2000 peak | Low of about $2,081 at end 2002; back above $10,000 in 2015; about $74,600 by 30 Sep 2026 |
| $100 a month from January 2000 ($32,100 paid in) | About $392,400 by 30 Sep 2026 |
| $4,000 a year withdrawn from $100,000, starting 2000 | Ran out of money in 2011 |
The same fund turned $10,000 into about $172,200 for one investor and left another waiting 15 years to break even. The difference was the starting date, which nobody can choose in advance.
How QQQ Is Taxed
For QQQ’s fiscal year to 30 September 2025, 100% of its ordinary dividends were designated qualified, and it paid no capital gains distribution. Because the yield is so low, most of QQQ’s return is an unrealised gain, so most of the tax in a taxable account waits until you sell.
Shares held for more than one year are taxed at long-term capital gains rates when sold. Inside an IRA, a 401(k) or an HSA, there is no yearly tax on dividends or gains. Investors outside the US face 30% US withholding on dividends unless a treaty lowers it, and Invesco’s Irish UCITS Nasdaq-100 fund, EQQQ, is a separate fund at a 0.30% ongoing charge.
QQQ Compared With Other Funds
| Fund | What It Holds | Expense Ratio | Key Difference |
|---|---|---|---|
| QQQ | Nasdaq-100 | 0.18% | The original, largest and most traded |
| QQQM | Nasdaq-100 | 0.15% | Same index and managers, $3 a year cheaper per $10,000 |
| VOO | S&P 500 | 0.03% | Broader, includes financials, top 10 40.6% (30 Sep 2026) |
| JEPQ | Mostly Nasdaq-100 stocks plus option notes | 0.35% | High monthly income, part of the gains given up |
| TQQQ | Three times the Nasdaq-100’s daily return | 0.78% net | Leveraged; long-run results can differ sharply from 3x |
QQQ and VOO overlap heavily. On 30 June 2026, 87 of QQQ’s 101 companies were also in VOO, making up 95.4% of QQQ’s value. For the closest comparisons, see FRC’s guides to QQQ vs QQQM and VOO vs VTI vs QQQ, and FRC’s guide to leveraged ETFs like TQQQ.
QQQ Next to Income Funds
Because QQQ pays so little, many investors pair it with income funds. SCHD focuses on dividend-paying companies chosen by quality screens, and JEPI adds option income to a lower-volatility stock portfolio. For both, see FRC’s complete guides to SCHD and JEPI, the JPMorgan Equity Premium Income ETF.
What QQQ Is Not
| Myth | Reality |
|---|---|
| “QQQ is the whole market.” | It holds about 100 Nasdaq-listed companies and no financials |
| “QQQ is a technology fund.” | Technology is 68.0% of the index, but it also holds retailers, media, health care and staples companies |
| “QQQ always recovers quickly.” | After 2000, the index took more than 15 years to regain its high |
| “QQQ is an income fund.” | Its 30-day SEC yield was 0.42% on 11 November 2026 |
| “QQQ and TQQQ are similar.” | TQQQ is leveraged three times daily and can lose most of its value in a fall |
Frequently Asked Questions
What is QQQ?
QQQ is the Invesco QQQ Trust, an ETF that holds the stocks of the Nasdaq-100 Index at their index weights. It began trading on 10 March 1999 and pays a small quarterly dividend.
What is QQQ’s expense ratio?
0.18% a year since 20 December 2025, or $18 on every $10,000. It was 0.20% before the fund converted from a unit investment trust.
Is QQQ a good investment?
It depends on your goals and your time horizon. QQQ returned 20.91% a year over the 10 years to 30 September 2026, but it fell about 83% from 2000 to 2002 at index level and lost 32.51% in 2022.
Does QQQ pay dividends?
Yes, quarterly, but they are small. The fiscal 2025 total was $2.84 a share, and the 30-day SEC yield was 0.42% on 11 November 2026.
What is the difference between QQQ and QQQM?
They track the same index with the same managers. QQQM charges 0.15% against QQQ’s 0.18%, while QQQ is far larger and more heavily traded.
What is the difference between QQQ and VOO?
QQQ holds about 100 Nasdaq-listed non-financial companies and is more concentrated, while VOO holds the S&P 500’s 500 companies, including financials, at 0.03%. QQQ has swung far more in both directions.
How much did QQQ lose in 2022?
QQQ returned −32.51% at NAV in 2022, against −18.11% for the S&P 500. It was back above its end-2021 level by the end of 2023.
Why is QQQ’s since-launch return lower than its 10-year return?
Because it launched in March 1999, just before the Nasdaq-100 fell about 83%. That crash still weighs on the since-launch figure of 10.88% a year to 30 September 2026.
What changed when QQQ converted from a trust?
From 22 December 2025, QQQ trades as an open-end fund. The fee fell to 0.18%, securities lending became possible and dividend cash can be reinvested while it waits to be paid. The name, ticker, index and holdings did not change.
Can I buy QQQ outside the US?
Many brokers outside the US offer it, but US withholding tax applies to the dividends. Investors in the UK and Europe often use Invesco’s Irish UCITS version, EQQQ, which is a separate fund.
Own the Growth, Know the Falls
QQQ has done what it was built to do: follow the Nasdaq-100, one of the strongest growth indexes of the past 15 years, at a modest fee. It has also delivered some of the deepest falls of any major fund, and the investors who did well were the ones who stayed through them.
The investors who use QQQ well are the ones who know its whole record before they buy. FRC’s How to Invest in QQQ course gives you the evidence, the history and a written plan of your own, so you hold QQQ through the next fall knowing exactly what you own.
This article is general education, not investment advice. Past performance does not guarantee future results, and dividends vary and are not guaranteed.
