Technology Companies Outshine Among Large Cap Growth Stocks
07/19/2011 0 comments
Large technology companies such as those in Nasdaq 100 (QQQ) (COMP) have been doing exceptionally well in the past five years. They out performed large cap growth stocks. The following table shows the performance of large growth stock ETFs:
As of 7/15/2011
07/15/2011
| Description | Symbol | 1 Yr | 3 Yr | 5 Yr | Avg. Volume(K) | 1 Yr Sharpe |
|---|---|---|---|---|---|---|
| PowerShares QQQ | QQQ | 27.88% | 10.04% | 10.54% | 52,975 | 177.47% |
| Vanguard Growth ETF | VUG | 26.77% | 5.52% | 5.66% | 373 | 200.76% |
| iShares Russell 1000 Growth Index | IWF | 27.2% | 5.95% | 5.56% | 2,268 | 204.37% |
| iShares S&P 500 Growth Index | IVW | 25.99% | 5.69% | 4.89% | 562 | 205.62% |
For information on more ETF performance, please refer to here. For various stock styles (such as large growth, mid cap, small value etc.), please refer to MyPlanIQ's stock style table.
Nasdaq 100 (QQQ) was the front runner in last 1, 3 and 5 year periods. These technology companies sidestepped the last financial crisis with pristine balance sheets and conservative growth plans, having learned a lesson from the technology bubble in 2001-2002. What is more interesting is that large U.S. technology companies have dramtically expanded their global reach and are now considered multi-national companies. In the past decade, they outsourced some of their development to emerging markets, gradually learned and developed local markets and now are in the perfect position to reap what they have sowed in these rapidly developing economies.
For example, Apple (AAPL) just released its latest quarter earnings report that stated its Chinese sales reached $3.8 billion, up almost sixfold from a year earlier. The company plans to open 30 stores in the September period, including in Hong Kong, broadening a retail chain that generated $3.5 billion in sales last quarter.
The following are the top holdings of QQQ, as of 7/18/2011
| Name | Symbol | Weights (%) |
| Apple | (AAPL) | 13.35% |
| Microsoft | (MSFT) | 8.66% |
| Oracle | (ORCL) | 6.16% |
| (GOOG) | 5.82% | |
| Intel | (INTC) | 4.56% |
| Amazon | (AMZN) | 3.69% |
| Qualcomm | (QCOM) | 3.57% |
| Cisco | (CSCO) | 3.28% |
| Amgen | (AMGN) | 1.96% |
| Comcast | (CMCSA) | 1.93% |
In general, U.S. large growth companies are positioned well for the economic recovery. For a retirement portfolio, proper exposure into these high quality multi-national companies can be beneficial.
Symbols: COMP, QQQQ, AAPL, ORCL, MSFT, GOOG, INTC, CSCO, AMZN, QCOM, AMGN, CMSCA, ETFs
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