With the SpaceX IPO Reshaping the Nasdaq, Is QQQ Still a Smart Investment Right Now?
Yahoo Finance ·
In a controversial move, Nasdaq changed its eligibility rules for the Nasdaq-100 index, allowing Space Exploration Technologies ( SPCX 7.80% ) to join without the traditional seasoning period. The space company will be added to the index 15 trading days after its IPO, on July 7. This means one of the most popular tech exchange-traded funds (ETFs) , the Invesco QQQ Trust ( QQQ 1.52% ) , will soon invest in SpaceX. There's been quite a bit of concern from investors about such a volatile stock getting fast-tracked, so let's see how large the SpaceX position will really be and if this means you should choose another ETF. Recent estimates put SpaceX's weight in the Nasdaq-100 at less than 1% when it joins the index. The Invesco QQQ Trust is a passive fund that tracks the Nasdaq-100, so its weighting will be the same. Even though SpaceX is already one of the largest companies by market cap, Nasdaq also weights the Nasdaq-100 by free float. Since only about 4% of SpaceX shares are publicly traded, it won't start out as a top holding.
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