The "Fabulous Five" stocks are driving gains in the S&P 500, benefiting QQQ and QQQM.

From MarketWatch: 2024-06-06 08:00:50

A small number of stocks, known as the “Fabulous Five,” are driving most of the S&P 500’s 2024 gains, benefiting ETFs like QQQ and QQQM. The Fab Five include Amazon, Alphabet, Meta Platforms, Microsoft, and Nvidia, making up about 30.5% of the ETFs’ holdings.

Despite some weakness in Apple and Tesla, QQQ and QQQM have seen YTD gains of nearly 11% thanks to their exposure to the Fab Five. These ETFs have outperformed due to their significant allocations to top-performing mega-cap growth stocks.

In contrast, healthcare stocks like Pfizer have struggled, weighing down the market’s returns. Pfizer has fallen almost 30% since October 2022, detracting from the index’s overall performance. Morningstar analysts see Pfizer as undervalued despite its recent challenges.

Four of the top five market contributors since 2022’s bottom are QQQ/QQQM members, highlighting the ETFs’ strong performance. While diversification has its benefits, the heavy exposure to the Fab Five has been a key driver of QQQ and QQQM’s success in recent years.



Read more at MarketWatch: Concentrated Market Leadership Benefiting QQQ, QQQM