SPY - How To Benefit From Trend And Momentum In QQQ
The Invesco QQQ (QQQ) replicates the Nasdaq 100 index. As such, the ETF is aggressively exposed to high-growth stocks in sectors such as technology, communications, and consumer cyclical. These sectors represent 42.6%, 21.51%, and 15.35% of the portfolio, respectively.
Source: Seeking Alpha Essential
Because of this, QQQ can be a particularly profitable investment when the economy is doing well, and risk appetite is rising in the market. Conversely, the ETF can suffer severe losses during bear markets and in times of declining risk appetite among investors.
To put the performance in perspective, the chart shows