Nasdaq 100 (QQQ) : The same as in february?

Invesco ETF Nasdaq 100 - QQQ - 15/10/2018

Short Term strategy: Negative (30%) / Trend -
Long Term strategy: Positive (70%) / Trend -

Characteristics of the ETF

The QQQ ETF (Invesco), which is quoted in USD on the Nasdaq, replicates the Nasdaq 100 index which is composed of the top 100 non-financial US stocks, mainly in the technology sector and listed on the Nasdaq, selected according to the importance of their market capitalization.

The ETF fees are 0.2% and the AUM is very high at $68bn. Replication is direct (physical) and there is a dividend distribution policy.

Alternative ETFS: ANX (Amundi in Euro), UST (Lyxor in Euro), CNDX (Ishares in USD)

Latest developments

The Nasdaq100 rose by 31.5% in 2017, the highest annual increase since the rebound in 2009, and the increase continued in 2018 (+ 11.8% since the beginning of the year), mainly thanks to the GAFAs apart from Facebook, which has a difficult year (-12.9% since the beginning of the year).

Fears over the US technology sector are piling up because of D. Trump's trade war against China which could have consequences for the margins of major players, particularly in the semiconductor field but also in other segments.

The results of the T3 2018 will therefore be scrutinized with great attention, in particular on the prospects that could take into account additional costs related to tariffs and necessary adjustments in the supply chain.


Index & components

The top 10 stocks in the index, including Apple, Amazon, Alphabet, Facebook and Microsoft, account for about 56% of the market capitalization of the index, while Apple alone accounts for 12,7% of the index.

The interest of this index lies in the fact of taking a diversified bet but concentrated on the most beautiful technological stocks, giving a good share to the "GAFA" (Google, Apple, Facebook and Amazon) which represent 37% of the capitalization.

The index is particularly influenced by Apple's prices, which fluctuate according to the success of its new smartphones. Note that large technology stocks have generally performed very well in 2017, especially GAFA but also semiconductors (Intel) and Microsoft. Large biotech stocks such as Gilead and Amgen have bounced back recently after a long period of wavering.

However, the attractiveness of US biotech companies remains significant at a national level, and these are prime targets for major US laboratories, as well as an alternative to transcontinental operations.

The volatility of the index is not very marked, which reflects the considerable weight of market capitalizations often above $ 300 billion for the top 10 companies, see $ 500 billion for the top 5. But the Nasdaq 100 is not just about its top 10 stocks, and the depth of the index makes it possible to invest in companies that are already established but still have a strong appreciation potential like Tesla, Xilinx or Symantec.

The hegemonic position of the GAFA in the world begins to provoke reactions, especially in Europe, both on competitive positions or abuse of dominant positions could trigger heavy fines, as for Google (€4.3bn fine by the EC), but also on taxation while European countries seek to find an agreement to tax the revenues generated on their territory. Chinese competitors are becoming more and more present, such as Alibaba or Tencent, and could soon threaten the supremacy of the leaders of American technology.

Weekly data

The weekly chart shows a bearish attack that is very similar to last February, with two big downward candlesticks followed by a rebound. It is therefore the reaction of the coming week that will be key and on which depends the underlying trend which remains positive. A further decline or a weak response could result in a long-term trend change.


Données journalières

On the daily chart, we observe that the corrective movement seems like last February to have found its first stopping point on the EMA200 which caused a rebound, but which remains to be confirmed next week. This rebound will have to exceed the area of 7350 pts to avoid an immediate relapse that would return to test the EMA200, with in case of break a downward reversal of the medium term trend.

ETF Objective

QQQ is an ETF listed in USD, which replicates the Nasdaq 100 index (103 US companies)


Inception date 10/03/1999
Expense ratio 0,2%
Benchmark Nasdaq 100
Issuer Invesco
Ticker QQQ
ISIN US73935A1043
Currency $
Exchange Nasdaq
Assets under Management 68 383 M$
Replication method Direct (Physical)
Dividend Distribution
Currency risk No
Number of Holdings 103
Risk 3/5

Country Breakdown

USA 100%

Sector Breakdown

Information Technology 44%
Telecom services 23%
Consumer discretionary 16%
Health Care 9%
Consumer staples 6%
Industrials 2%

Top Ten Holdings

Apple 13%
Amazon 11%
Microsoft 10%
Alphabet 9%
Facebook 5%
Intel 3%
Cisco 3%