Invesco QQQ Doesn't Own a Single Bank, and That's Not the Only Thing the Nasdaq-100 Leaves Out
Key PointsThe Nasdaq-100 only accepts companies listed on Nasdaq, and it bans financial firms altogether.
JPMorgan Chase and Wells Fargo reported strong third-quarter earnings, with combined net income exceeding $21 billion. However, the Invesco QQQ Trust, which tracks the Nasdaq-100 index, does not include any banks or financial companies. This exclusion is due to the fund's rule of only including non-financial companies listed on the Nasdaq exchange.
Other notable omissions include companies like Berkshire Hathaway, Visa, Oracle, and Taiwan Semiconductor Manufacturing, all of which are traded on the New York Stock Exchange. Despite these exclusions, the QQQ has delivered impressive returns over the long term, with a 21% annualized gain over the past decade. When compared to the State Street Financial Select Sector SPDR ETF, which focuses on financial stocks, QQQ has outperformed in 6 out of the last 10 years.
Investors seeking the excluded sectors can consider financial sector funds or S&P 500 ETFs like the Vanguard S&P 500 ETF, which include the large banks and NYSE-listed companies not held by QQQ.
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