As of early December, the highly mutated omicron variant of the COVID-19 virus has entered the U.S. Fed Chair Jerome Powell has removed the word "transitory" from the inflation conversation. Naturally, major stock indices took a nosedive, and the Nasdaq 100 index wasn't an exception. The Invesco QQQ Trust Series 1 ETF (NASDAQ:QQQ), which tracks the Nasdaq 100, knows this first hand.
Any ETF is made up of a basket of securities, called its holdings. What stocks currently make up the QQQ fund and contribute to its volatility?
What industries does QQQ cover?
Unlike thematic ETFs that stick to a single industry or sector, QQQ runs the gamut. Still, it's tech-heavy—with 58.06 percent of its holdings currently representing technology companies. This makes sense given that it tracks companies on the tech-heavy Nasdaq Exchange.
Consumer services account for 18.41 percent of the holdings, while consumer goods make up 10.06 percent of the weight. Healthcare and industrials account for 5.98 percent and 5.44 percent, respectively.
Telecommunications (0.95 percent), utilities (0.86 percent), and basic materials (0.22 percent) account for the least weight.
What are the top QQQ holdings in December 2021?
ETF holdings can (and do) shift. As of December 2021, the top holdings include the following 20 Nasdaq-listed stocks:
|Company||Ticker Symbol||What the Company Does||Percentage of QQQ|
|Microsoft Corp.||MSFT||Technology and software||10.87|
|Apple Inc.||AAPL||Technology and software||10.80|
|Amazon.com Inc.||AMZN||E-commerce and advertising||7.45|
|Tesla Inc.||TSLA||Luxury electric vehicles||6.03|
|NVIDIA Corp.||NVDA||Computer systems and semiconductor design||4.24|
|Alphabet Inc. Class C||GOOG||Digital ads and more||4.14|
|Alphabet Inc. Class A||GOOGL||Digital ads and more||3.89|
|Meta Platforms Inc.||FB||Digital ads and more||3.37|
|PayPal Holdings Inc.||PYPL||Digital payments||1.81|
|Cisco Systems Inc.||CSCO||Networking hardware||1.57|
|Comcast Corp. Class A||CMCSA||Telecommunications and internet||1.56|
|PepsiCo Inc.||PEP||Food and beverage||1.48|
|Broadcom Inc.||AVGO||Semiconductor manufacturing and more||1.45|
|Costco Wholesale Corp.||COST||Wholesale groceries and more||1.44|
|Intel Corp.||INTC||Semiconductor manufacturing and more||1.32|
|Texas Instruments||TXN||Semiconductor manufacturing and more||1.15|
|Intuit Inc.||INTU||Global technology platform||1.14|
|Honeywell International Inc.||HON||Aerospace, building technology, and more||1.00|
Will QQQ recover?
Every investment carries risk, but diverse funds like QQQ are more likely to experience a smooth recovery after economic difficulties. After QQQ lost nearly a third of its value in a five-week crash ending March 20, 2020, it took a few months to reach its pre-pandemic height. The fund has grown 27.53 percent in the year ending December 2, 2021.
Even with the latest slump, QQQ will likely recover well beyond its current valuation, which makes it a buy-the-dip strategy and a potentially smart move for any long-term investor.