Lots to Admire in These ETFs

Read enough financial publications and one is apt to find there’s no shortage of rankings. There’s the Fortune 500 as well as rankings of companies based on customer and employee satisfaction. There are also environmental, social and governance (ESG) standards.

Some polls, including those rooted in employee aspects and ESG, can be somewhat instructive for investors. Add corporate admiration to that list. Last week, Fortune published its annual list of the world’s most admired companies. Plenty of members of the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM) made the cut.

Given the long-running penchant of the Nasdaq-100 (NDX) -- the underlying index for the two Invesco ETFs – to outpace the S&P 500, there’s some validity in the notion that highly admired companies can deliver upside for shareholders.

Inside the Holdings Rankings for QQQ, QQQM

“Korn Ferry asked executives, directors, and analysts to rate enterprises in their own industry on nine criteria, from investment value and quality of management and products to social responsibility and ability to attract talent. A company’s score must rank in the top half of its industry survey to be listed,” according to Fortune.

The top 50 companies ranked in order of admiration. The remainder list alphabetically and rank within their respective industries. Apple (AAPL), Microsoft (MSFT), and Amazon.com (AMZN) were the top three companies on the Fortune list. Those are the top three holdings in QQQ and QQQM. They combine for over 21% of the ETFs’ rosters.

Technology growth darlings Alphabet (GOOG) and Nvidia (NVDA) combine for over 9.5% of the QQQ/QQQM portfolios. They are also among Fortune’s 10 most admired companies.

“Meanwhile Nvidia, whose GPU chips are powering the world’s forays into generative AI, soared to its highest-ever ranking at No. 10. In other industries, mega-retailer Walmart (No. 9) returned to the top 10 for the first time in 14 years. [And] COVID-vaccine maker Moderna (No. 37) became a first-time All-Star,” reported the magazine.

Moderna is a healthcare stock within the two Invesco ETFs. As the inclusion of Walmart confirms, it’s possible for a company to be highly admired without being directly involved in a high-tech field. On that note, it’s worth pointing out that Costco Wholesale Corp. (COST) ranks sixth on the Fortune list. That’s relevant to QQQ and QQQM investors. That's because Costco is the ETFs’ largest consumer staples holding, at an allocation of 2.40%.

For more news, information, and analysis, visit the ETF Education Channel.

Read more on ETFTrends.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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