5 Top-Performing Stocks In Nasdaq ETF

With a strong rebound in the stocks this year, the Nasdaq Composite Index is on the verge of ending its longest bear market since 1991. A closing at or above 7,431.50 for the index will mark a sharp rise of 20% from the Dec 24 low and an exit from the bear-market territory.

The rally was powered by a solid comeback of the technology sector, which was beaten down badly in the fourth quarter last year. A slew of stronger-than-expected earnings results by major technology firms and signs of progress in U.S.-China trade deal renewed investors’ sentiment. Additionally, a rebound in oil price, as well as Fed’s patience approach toward rate hike, supported the gains.

Further, the sector’s long-term story remains intact with the emergence of cutting-edge technology such as cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, artificial intelligence, and machine. The deployment of 5G (fifth-generation) technology — the next wireless revolution — is creating further opportunities. The wave of mergers and acquisitions is also providing further impetus to the space.

Adding to the strength is a pickup in the economy and better job prospects that are giving a solid boost to economically sensitive growth sectors like technology, which perform typically well in a maturing economic cycle.

Further, healthcare and consumer discretionary stocks are also providing a nice boost to Nasdaq. A defensive tilt in uncertain times has raised the appeal of healthcare stocks while a booming economy coupled with higher consumer spending is propelling discretionary stocks higher.

As a result, Invesco QQQ (QQQ - Free Report), which serves as a proxy for the index, has climbed 10.9% so far this year. Let’s take a closer look at the fundamentals of QQQ.

QQQ in Focus

This ETF provides exposure to the 103 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Information technology accounts for 42.5% of the assets, while communication services takes a 22.9% share. QQQ is one of the largest and most popular ETFs in the large-cap space with AUM of $65.4 billion and average daily volume of around 52.6 million shares. It charges investors 20 bps in annual fees. The fund has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

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