What Is Invesco QQQ ETF? Nasdaq-100 Holdings, Strategy, Fees and Risks

Summary

Invesco QQQ ETF (NASDAQ: QQQ) is an exchange-traded fund designed to track the Nasdaq-100 Index, which represents 100 of the largest non-financial companies listed on the Nasdaq Stock Market.

QQQ was launched on March 10, 1999 and has become one of the world's largest and most widely followed ETFs. Its current total expense ratio is 0.18%. Invesco states that QQQ and the Nasdaq-100 are rebalanced quarterly and reconstituted annually.

QQQ is often described as a “technology ETF,” but that description is incomplete. Technology represents a large part of the portfolio, while QQQ also includes companies from consumer discretionary, communication services, healthcare, industrials and other eligible non-financial industries. Invesco itself describes QQQ as containing holdings from multiple sectors rather than being exclusively a technology fund.

QQQ also underwent an important structural change in late 2025. It was converted from its historic unit investment trust (UIT) structure into a modern open-end ETF, while its investment objective and Nasdaq-100 exposure remained unchanged. The change reduced its expense ratio from 0.20% to 0.18% and gave the fund greater operational flexibility.

Eligible MEXC users looking for tokenized exposure linked to QQQ can access the QQQON/USDT spot market. QQQON is a separate Ondo tokenized product and should not be confused with direct ownership of QQQ shares.

What Is QQQ?

QQQ is an ETF managed by Invesco.

Its objective is to track the investment results of the Nasdaq-100 Index.

Rather than selecting stocks based on an active portfolio manager's views, QQQ provides rules-based exposure to the companies included in the underlying index.

The basic structure is:

Nasdaq-100 Index

↓

Invesco QQQ ETF

↓

QQQ Shares

The Nasdaq-100 is not directly investable. QQQ provides an investment vehicle designed to follow its performance, subject to fund expenses and normal tracking differences. Invesco notes that a fund's return may not exactly match the return of its underlying index.

What Is the Nasdaq-100 Index?

The Nasdaq-100 Index (NDX) represents 100 of the largest non-financial companies listed on Nasdaq.

Nasdaq describes it as a systematic, rules-based index using a modified market-capitalization weighting methodology. It is reconstituted annually and rebalanced quarterly.

The index includes companies from industries such as:

• Technology;
• Consumer discretionary;
• Communication services;
• Healthcare;
• Industrials;
• Consumer staples;
• Utilities.

Financial companies are excluded under the index's eligibility framework.

QQQ Is Not the Nasdaq Composite

This is one of the most common misunderstandings.

The Nasdaq Composite broadly measures Nasdaq-listed domestic and international common stocks.

The Nasdaq-100 is much narrower and focuses on 100 of the largest eligible non-financial companies listed on Nasdaq.

Therefore:

Nasdaq Composite ≠ Nasdaq-100 ≠ QQQ

The relationship is:

Nasdaq-100

→ tracked by

QQQ

QQQ should therefore not simply be called “the Nasdaq.”

How Does QQQ Choose Its Holdings?

QQQ follows the companies selected by the Nasdaq-100 methodology rather than independently choosing investments.

Nasdaq uses a rules-based selection process centered on eligible Nasdaq-listed non-financial companies and market capitalization.

The index is:

• Rebalanced quarterly to adjust weights;
• Reconstituted annually to reassess membership.

That means the portfolio evolves as the market changes.

Companies can:

• Grow into the index;
• Lose eligibility;
• Fall below selection thresholds;
• Be removed during annual reconstitution.

QQQ is therefore not a static portfolio of the same companies forever.

Why Can QQQ Hold More Than 100 Securities?

“Nasdaq-100” refers to 100 companies, not necessarily exactly 100 separate securities.

Some companies can have multiple eligible share classes.

For example, Alphabet has historically had more than one share class represented in Nasdaq-100-related portfolios.

Invesco reported 102 QQQ securities as of May 11, 2026, despite the index representing 100 companies.

This distinction is useful when investors compare an official holdings list with the “100” in the index name.

What Companies Does QQQ Own?

QQQ's holdings change over time as prices, weights and index membership change.

Its portfolio has substantial exposure to companies associated with areas such as:

• Artificial intelligence;
• Semiconductors;
• Cloud computing;
• Software;
• Digital advertising;
• E-commerce;
• Consumer technology;
• Biotechnology;
• Data centers.

Current holdings should always be checked through Invesco's live holdings information because weights can change daily. Invesco explicitly notes that ETF holdings are subject to change.

Is QQQ an AI ETF?

Not formally.

QQQ does not use an investment mandate saying it must own artificial-intelligence companies.

Instead, many of the largest Nasdaq-listed companies happen to be heavily involved in:

• AI accelerators;
• Cloud infrastructure;
• AI software;
• Data centers;
• Digital platforms;
• Semiconductor equipment.

As a result, QQQ can have substantial economic exposure to AI-related growth without being a dedicated AI thematic ETF.

This distinction matters because QQQ's holdings are determined by the Nasdaq-100 methodology, not by an AI stock-selection committee.

How Is QQQ Weighted?

The Nasdaq-100 uses a modified market-capitalization weighting methodology.

In general, larger companies receive larger weights, subject to index rules intended to control excessive concentration.

Therefore, a 5% move in a very large QQQ holding can have a much greater effect on QQQ than a 5% move in one of its smaller holdings. Nasdaq describes the index as modified market-cap weighted rather than equal weighted.

What Changed for QQQ in 2025–2026?

This is particularly important because many older QQQ articles now describe an outdated fund structure.

QQQ Changed From a UIT to an Open-End ETF

Historically, QQQ operated as a unit investment trust.

QQQ shareholders approved modernization of the structure in December 2025, and the fund transitioned to an open-end ETF structure. Invesco said the change did not alter the fund's Nasdaq-100 exposure or investment objective.

Expense Ratio Fell to 0.18%

The structural change reduced QQQ's total expense ratio from:

0.20% → 0.18%

Invesco describes this as a 10% reduction in the expense ratio.

The Fund Has More Operational Flexibility

Under the open-end ETF structure, QQQ gained additional capabilities, including the ability to reinvest income, use futures under applicable rules and participate in securities lending—activities that had been restricted by the old UIT structure.

Did the Nasdaq-100 Methodology Also Change in 2026?

Yes.

Nasdaq implemented targeted changes to the Nasdaq-100 methodology effective May 1, 2026, following a public consultation. Nasdaq stated that the changes were designed to respond to developments in public-market structures while preserving the index's core objective of representing 100 of the largest Nasdaq-listed non-financial companies.

This does not mean QQQ abandoned the Nasdaq-100.

QQQ continues to track the index under its current methodology.

What Is the QQQ Expense Ratio?

QQQ's current total expense ratio is 0.18%.

A simplified example:

If an investor had:

$10,000 invested

then:

$10,000 × 0.18% = $18

would represent the approximate annual expense at that asset level, before considering changes in portfolio value.

This is a simplified illustration rather than a separate bill charged directly to the investor.

Why Is QQQ Popular?

QQQ offers one investment vehicle for exposure to many large Nasdaq-listed growth companies.

Potential reasons investors follow QQQ include:

• Exposure to large innovative companies;
• Strong representation from technology;
• Semiconductor exposure;
• Cloud and AI exposure;
• High secondary-market liquidity;
• A long operating history;
• Transparent ETF holdings.

However, popularity does not reduce investment risk.

Is QQQ Diversified?

QQQ contains many companies, but investors should be careful with the word diversified.

Invesco formally describes QQQ as a non-diversified fund and warns that investments concentrated in sectors such as technology can experience greater volatility than more broadly diversified portfolios.

QQQ can therefore diversify company-specific risk compared with holding one stock while still carrying significant:

• Sector concentration;
• Large-cap concentration;
• Growth-stock exposure.

Main Risks of QQQ

Technology Concentration Risk

Technology has historically represented a large share of the portfolio.

Weakness in semiconductors, software or large technology companies can therefore have an outsized effect. Invesco specifically highlights sector-concentration risk.

Valuation Risk

Fast-growing companies can command high valuation multiples.

If investors become less willing to pay those multiples, stock prices can decline even when earnings continue growing.

Interest-Rate Risk

Growth-stock valuations can be sensitive to changes in interest rates and discount rates.

Concentration in Large Companies

Because QQQ uses modified market-cap weighting, its largest holdings can materially influence overall performance.

Index Tracking Risk

QQQ seeks to track the Nasdaq-100, but fund returns may differ because of:

• Expenses;
• Portfolio implementation;
• Corporate actions;
• Trading frictions.

Market Risk

QQQ can lose substantial value during broad equity-market declines.

Holding 100 companies does not guarantee a profit or prevent losses.

What Is QQQON?

QQQON, styled by Ondo as QQQon, is a tokenized product whose underlying asset is Invesco QQQ.

The relationship is:

Nasdaq-100

↓

QQQ ETF

↓

Ondo QQQON

↓

QQQON/USDT on MEXC

Ondo's official QQQon product page identifies Invesco QQQ as the underlying asset. Ondo also states that its tokenized products provide economic exposure but are not themselves ETFs and do not give holders a right to receive the underlying QQQ shares.

Eligible users can access:

Trade QQQON/USDT on MEXC

MEXC currently identifies the pair as Invesco QQQ (Ondo).

FAQ

What is QQQ?

QQQ is an Invesco ETF designed to track the Nasdaq-100 Index.

Is QQQ a stock?

No. QQQ is an ETF, although users frequently search for terms such as “QQQ stock.”

What index does QQQ track?

The Nasdaq-100 Index.

Does QQQ own only technology companies?

No. Technology exposure is substantial, but QQQ includes holdings across multiple eligible non-financial sectors.

What is QQQ's expense ratio in 2026?

The current total expense ratio is 0.18%.

Did QQQ change structure?

Yes. It transitioned from a UIT structure to an open-end ETF structure in late 2025 while retaining its Nasdaq-100 investment objective.

What is QQQON?

QQQON is an Ondo tokenized product designed to provide economic exposure linked to QQQ.

Where can eligible users trade QQQON?

Eligible users can access the QQQON/USDT market on MEXC.

Risk Disclaimer

This article is provided for informational and educational purposes only and does not constitute investment, financial, legal, accounting or tax advice.

QQQ is exposed to equity-market risk, sector concentration, valuation changes, interest rates, foreign-issuer risks and potential differences between fund and index performance. Invesco states that QQQ is non-diversified and may experience greater volatility than a more diversified investment.

QQQON introduces additional token-issuer, backing, tracking, blockchain, liquidity, USDT, centralized-exchange custody and jurisdictional risks.