5 Best Nasdaq ETF Stocks That Gained in April
JThe tech-heavy Nasdaq Composite Index had its worst month since 2008, after falling 15%. The decline came on the heels of a tech rout, which wiped out more than $1.8 trillion in value from tech stocks in April alone.
Invesco QQQ QQQ, which serves as a proxy for the index, plunged 8.7% last month. Although most stocks in QQQ’s portfolio declined, a few survived the turmoil. These include The Kraft Heinz Company KHC, Vertex Pharmaceuticals Incorporated VRTX, Constellation Energy Corporation CEG, Ross Stores Inc. SWR and Monster Beverage Corporation MNST.
Tech stocks had the worst start to the year in two decades due to Fed policy tightening. The central bank is expected to take a more aggressive course in raising rates to tackle 40-year high inflation after raising rates by 25 basis points at the last FOMC meeting. Speaking at a panel hosted by the International Monetary Fund on April 21, Jerome Powell flagged a half-percentage-point rate hike at his May meeting and pointed to similar rate hikes by the to reduce inflation. With inflation roughly three times the Fed’s 2% target, “it’s worth moving a little faster,” Powell said (read: ETF areas to consider as the Fed remains super hawkish).
As the Fed plans to raise interest rates faster to control inflation, traders are less willing to pay the high prices they had paid for the tech giants. Higher rates are particularly negative for technology stocks which are valued on future growth expectations. Additionally, the ongoing Russian-Ukrainian war and China’s strict containment measures to combat COVID-19 raised concerns about the global economic expansion which continued to weigh on investor sentiment.
Let’s take a closer look at the fundamentals of QQQ.
QQQ in brief
Invesco QQQ provides exposure to the 102 largest national and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Information Technology accounts for 50.4% of assets, while Communication Services and Consumer Discretionary represent respectively 16.4% and 16.1% of the shares.
Invesco QQQ is one of the largest and most popular large-cap ETFs, with $171 billion in assets under management and average daily volume of around 69 million shares. Invesco QQQ charges investors 20 basis points in annual fees and has a No. 2 (buy) rank Zacks ETF with a medium risk outlook (read: Should you short Nasdaq ETFs as the index hits a new 2022 low?).
Below we have highlighted the five stocks mentioned above in the ETF with their respective positions in the fund basket.
Best Performing Stocks in QQQ
Kraft-Heinz is one of the largest consumer packaged food and beverage companies in North America. It manufactures and markets food and beverage products such as condiments and sauces, cheese as well as dairy products, meals, meats, soft drinks, coffee and other grocery products.
KHC rose 8.3% in April and its profits are expected to fall 8.2% this year. The stock represents 0.4% of QQQ’s assets and has a Zacks #3 (Hold) rank. Kraft Heinz has a VGM score of B.
Vertex Pharmaceuticals focuses on the discovery, development and commercialization of small molecule drugs, targeting serious diseases. The title has climbed nearly 6% in one month and weighs 0.6% in the fund’s basket.
Vertex Pharmaceuticals forecasts a profit growth rate of 11.8% for this year. It has a Zacks Rank #2 (Buy).
Constellation Energy generates and sells electricity in the United States. The stock represents 0.2% of the assets of the QQQ portfolio.
Constellation Energy gained 5.1% last month. It saw a positive earnings estimate revision of 12 cents in the month for this year. Constellation Energy has a Zacks rank of #3 (Hold) and a VGM score of A.
Ross Stores operates as a discount retailer of clothing and home accessories, primarily in the United States. This stock rose 4.4% last month and its earnings are expected to rise a modest 3.9% for the fiscal year (ending January 2023).
Ross Stores represents 0.3% of QQQ shares and has a Zacks ETF rating of 3. It has a Momentum score of A.
monster drink is a distributor and distributor of energy drinks and alternative drinks. It gained 3.7% in April and weighed 0.38% in the fund’s basket (read: Food ETFs get investor love despite shortage).
Monster Beverage Corporation is expected to see earnings growth of 9% for this year and has a Zacks rank of No. 4 (selling).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.