Should Invesco QQQ (QQQ) Be on Your Investing Radar?

Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Invesco QQQ (QQQ) is a passively managed exchange traded fund launched on 03/10/1999.

The fund is sponsored by Invesco. It has amassed assets over $157.66 billion, making it the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.

Why Large Cap Growth

Large cap companies usually have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.

Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.20%, making it one of the cheaper products in the space.