QQQ Explained: How to Invest in the Nasdaq-100 from Peru

QQQ is the Invesco QQQ Trust, an exchange-traded fund that tracks the Nasdaq-100 index - the 100 largest non-financial companies listed on the Nasdaq. For a retail investor in Peru, buying QQQ is the simplest way to own a single tech-heavy basket of US giants like Apple, Microsoft, Nvidia and Amazon in one trade, instead of picking individual stocks. This guide explains what you are actually buying, how it differs from an S&P 500 fund, what it costs, and how to buy and be taxed on it from Peru.

The Nasdaq-100 is a stock market index made up of the 100 largest non-financial companies on the Nasdaq exchange, weighted mostly by size. In practice that means it is dominated by technology and communication names - the so-called mega-caps. When you buy one share of QQQ, your money is spread across all of those companies in proportion to their weight, so a single purchase gives you instant diversification across the largest US tech firms. That is the appeal: you are not betting your savings on one company being right.

The trade-off is concentration. Because the index is weighted by company size and excludes financials, a large slice of QQQ sits in a handful of the biggest technology stocks. The exact figures move over time, but the top ten holdings have historically accounted for roughly half of the fund. That is very different from a broad, all-sector fund, and it is the single most important thing to understand before you buy.

Most Peruvian investors researching QQQ are already familiar with the S&P 500. The clearest way to understand QQQ is by contrast. The S&P 500 tracks around 500 large US companies across every sector - technology, healthcare, energy, banks, consumer goods and more. The Nasdaq-100 tracks about 100 companies, excludes financials, and leans heavily toward technology. So the S&P 500 is the broad US market; the Nasdaq-100 is a concentrated, tech-tilted slice of it.

That difference shows up in behavior. A tech-tilted fund has historically been more volatile than the broad market - it has tended to rise faster in tech-led rallies and fall harder in tech sell-offs. Over the past decade the Nasdaq-100 has generally outperformed the S&P 500, but past performance does not guarantee future returns, and higher potential reward has come with bigger swings. Neither fund is safer in an absolute sense; they carry different risk profiles. If you want to compare the S&P 500 ETFs themselves, see our guide on choosing between VOO, SPY, IVV and SPLG.

Invesco runs two funds on the same Nasdaq-100 index. QQQ is the original, with an expense ratio - the annual fee a fund charges, expressed as a percentage of your money - of about 0.20%. QQQM, launched in 2020, tracks the identical index but charges roughly 0.15%. The expense ratio is the slice of your investment the manager keeps each year, so a lower one means more of the return stays with you.

So why does anyone still buy QQQ? Liquidity. QQQ is one of the most heavily traded ETFs in the world, which makes it attractive to active traders who want tight spreads and deep options markets. For a long-term buy-and-hold investor in Peru who is not trading in and out, the lower-fee QQQM is often the more cost-efficient version of the same exposure. Same index, same companies - the choice comes down to how you plan to use it.

QQQ is a US-listed ETF, so you buy it through a broker that gives you access to US markets. Peruvian investors generally use one of two routes: an international online broker (such as Interactive Brokers) that lets you fund an account in US dollars and buy US-listed ETFs directly, or a local broker or bank that offers access to foreign securities. Compare the account-opening requirements, the commission per trade, and any custody or maintenance fees before you commit.

Two practical points for Peru. First, currency: QQQ trades in US dollars, so you take on currency risk between the Peruvian sol and the dollar - the sol-dollar exchange rate will affect your returns in soles regardless of how the fund does. Second, cost discipline: for a beginner investing small amounts on a schedule, a common educational technique is dollar-cost averaging - investing a fixed amount at regular intervals rather than trying to time the market.

This tax layer is also why some LATAM investors look at Ireland-domiciled versions of similar index funds, which can reduce dividend-withholding drag for non-US investors. It is a more advanced topic, but worth knowing exists once you are comfortable with the basics. For the Peru-specific detail on withholding and SUNAT reporting, see our dedicated guide on Peru stock and ETF taxes.

QQQ gives you concentrated exposure to the biggest US technology companies in a single, low-cost, easy-to-buy fund. That concentration is both its strength and its risk: it has historically delivered strong long-term returns alongside sharper drops than the broad market. It is not a substitute for a diversified portfolio, and it is not risk-free - no investment is. If you understand that you are making a deliberate tech tilt, want long-term exposure, and can stomach the volatility, QQQ (or the cheaper QQQM) is a straightforward way to get it. If you want simple, broad US exposure instead, an S&P 500 ETF is the more diversified starting point.