NEW YORK — The Invesco QQQ Trust (QQQ) structurally excludes all financial institutions. JPMorgan Chase and Wells Fargo reported third-quarter earnings Tuesday combining for $21 billion in net income — neither appears in QQQ's portfolio.
QQQ tracks the Nasdaq-100 index, which holds only non-financial companies listed on Nasdaq. This dual filter—sector exclusion and exchange listing requirement—eliminates an entire market segment. Financials represent the second-largest sector in the S&P 500 at approximately 11.5 percent of that index as of Oct. 12. QQQ holds zero banks and zero insurers.
The listing rule excludes other major companies regardless of sector. Berkshire Hathaway, Visa, Oracle and Taiwan Semiconductor Manufacturing don't appear in QQQ because they trade on the New York Stock Exchange, not Nasdaq. Walmart's December move from NYSE to Nasdaq triggered its January inclusion in the Nasdaq-100—the same business, new exchange listing.
QQQ's 10-year annual return through September was approximately 21 percent. The State Street Financial Select Sector SPDR ETF (XLF), which holds S&P 500 financial stocks, averaged 13 percent over the same period.
Year-to-date performance has been stark. QQQ is up about 21 percent in 2026 while XLF is up only around 2 percent. But the outperformance is inconsistent. XLF beat QQQ in four of the past 10 calendar years: 2016, 2021, 2022 and 2024. In 2022, QQQ fell about 33 percent while XLF dropped about 11 percent. In 2024, XLF returned more than 30 percent, beating QQQ by about 5 percentage points.
QQQ investors have not paid for the missing sector over the full decade, but they surrendered downside protection during years when growth stocks declined sharply.
