ETF Ticker Shakeup: QQQQ Now QQQ

by on March 23, 2011 | ETFs Mentioned:

One of the largest and most popular U.S.-listed ETFs underwent a change of its trading symbol on Wednesday, as the PowerShares QQQ, which previously traded under the symbol “QQQQ” on the NASDAQ Exchange, dropped a letter to make its ticker consistent with the fund name. The new ETF will trade under the ticker QQQ; the exchange and all other fund attributes will remain the same.

The PowerShares QQQ, which was previously known as the NASDAQ-100 Index Tracking Stock, is one of the oldest exchange-traded products and has a rather unique history. The fund, structured as a Unit Investment Trust (UIT) began trading in early 1999, and Nasdaq transferred sponsorship of the product to PowerShares in 2007. The PowerShares QQQ has aggregate assets of more than $23 billion, and is one of the ten largest U.S.-listed ETFs by total assets.

The index to which QQQ is linked, the NASDAQ-100 Index, includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization. But the index isn’t a simple market capitalization-weighted benchmark; it underwent some minor surgery about 13 years ago to reduce the weighting to MSFT and address concentration issues that would have run afoul of securities regulations. One result of those tweaks is an amplified weighting to AAPL, which makes up about 20% of the fund’s holdings now [see Understanding The Quirks of QQQQ].

The ETF has a heavy tilt towards the tech sector, which makes up more than 60% of holdings. The remainder of the portfolio is spread across other corners of the market, though financials, energy, and utilities are excluded from the fund [see QQQ holdings].

Disclosure: No positions at time of writing.