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PowerShares ETFs Tumble But 2 See Strong Gains

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PowerShares' largest ETF has tumbled in the December market sell-off. The $40.43 billionQQQ ( QQQ ), with $40.43 billion in assets, is 4% off its 14-year high set on Nov. 11.

But it handily beat the S&P 500 with its returns of 21.52% vs. 14.39% for 1 year, average annual 24.48% vs. 20.40% for three years, 19.32% vs. 14.81% for five years and 10.56 vs. 5.36% for 10 years.

QQQ is so popular that many investors , both institutions and individuals, know it simply as the Q's, or the cubes. It is the fourth most widely traded ETF .

Among QQQ's other attractions: a 0.20% expense ratio, or $20 in fees a year for every $10,000 invested to own the 100 largest domestic and international nonfinancial stocks in the Nasdaq 100 Index. It also has a penny bid-ask spread.

"QQQ has always been a favorite of financial advisers," PowerShares managing director Dan Draper told IBD in a recent interview.

Year to date, QQQ has climbed 15% on the strength ofApple ( AAPL ) andMicrosoft ( MSFT ). The two tech giants account for 22% of QQQ's holdings. By comparison, SPDR S&P 500 ( SPY ), tracking the broad stock market, has risen 10% so far in 2014.

Apple and Microsoft are also the two top holdings, respectively, of SPY. But they account for 6% of its portfolio weighting.

PowerShares' next two largest ETFs also are off recent highs. The $5.7 billionSenior Loan ( BKLN ) is off 6%, while $4.5 billionS&P 500 Low Volatility ([ STOCK[SPLV]]) is down 3%. While Senior Loan is off nearly 2% year to date, Low Volatility is up 13%.

In the broad technology space, the standout this year has been semiconductor ETFs.PowerShares Dynamic Semiconductors (PSI), with $30.8 million in assets, leads the pack, with a 32% gain in 2014.

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


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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