Invesco QQQ Doesn't Own a Single Bank, and That's Not the Only Thing the Nasdaq-100 Leaves Out

JPMorgan Chase and Wells Fargo each released third-quarter results on Tuesday, and the two banks made more than $21 billion between them. JPMorgan's net income grew 6% year over year to $15.3 billion, and Wells Fargo's climbed around 6% to almost $6 billion.

Investors in the Invesco QQQ Trust (NASDAQ:QQQ) didn't own a slice of either one. The popular exchange-traded fund (ETF) tracks the Nasdaq-100, and the index doesn't admit banks -- or any other company classified as financial, for that matter.

And banks aren't the only thing missing. Some of the biggest companies in the U.S. stock market are absent for a reason that has nothing to do with what they sell.

I don't think any of this is a reason to skip QQQ, which trades near $742 and has risen about 21% in 2026 as of this writing. But it's worth knowing what the fund leaves out before using it as a stand-in for the whole stock market.

Image source: JPMorgan Chase.

Two rules explain what's missing

The Nasdaq-100 is built to track 100 of the biggest non-financial companies listed on Nasdaq, and each half of that description acts as a rule. A company can't be classified as a financial business, and it must keep its primary listing on a Nasdaq exchange.

The first rule cuts out a big chunk of the market. Financials are the second-largest sector in the S&P 500 (SNPINDEX:^GSPC), at around 11.5% of the index as of Oct. 12. QQQ, though, holds no banks and no insurers at all.

The second rule might go further than many investors realize. Berkshire Hathaway and Visa both trade on the New York Stock Exchange (NYSE), so they're out no matter how they're classified. Oracle and Taiwan Semiconductor Manufacturing are missing for the same reason, though both are tech companies.

Walmart shows how mechanical the listing rule can be. The retailer moved its shares from the NYSE to Nasdaq last December, and it joined the Nasdaq-100 in January. The business, of course, was the same as before -- just the listing changed.

Has skipping banks hurt returns?

Leaving out banks hasn't hurt QQQ's long-term returns. Its annual return for the 10 years through September was around 21%. The State Street Financial Select Sector SPDR ETF (NYSEMKT:XLF), which holds the S&P 500's financial stocks, averaged about 13% a year over the same span.

Compounded for a decade, 21% a year grows an investment more than sixfold, and 13% a year a bit more than triples it.

The gap has been even bigger lately. As of this writing, the financial fund is up only around 2% in 2026 -- a small fraction of QQQ's gain.

But the year-by-year results are less lopsided. In four of the past 10 calendar years (2016, 2021, 2022, and 2024), the financial fund came out ahead of QQQ. The standout is 2022, when QQQ fell around 33% and the financial fund dropped about 11%. And in 2024, a strong year for each, the financial fund returned more than 30% and beat QQQ by about 5 percentage points.

Put another way, QQQ investors haven't paid for the missing sector over time. But they've arguably given up some protection in years when growth stocks drop.

An S&P 500 fund fills most of the gap

A QQQ holder who wants what the fund leaves out has two simple choices. The most direct is a financial sector fund like the State Street one. But it's a concentrated bet in its own right, as Berkshire, JPMorgan, Visa, and Mastercard made up about 39% of that fund as of Oct. 12.

The simpler pairing, I think, is a fund that tracks the S&P 500, such as the Vanguard S&P 500 ETF (NYSEMKT:VOO). It owns the big banks and most of the NYSE-listed giants that QQQ can't.

Of course, it also holds the big tech companies. Nvidia, Apple, and Microsoft are the three largest stocks in the S&P 500 and the three largest holdings in QQQ, so the two funds overlap quite a lot.

In the end, I don't think the missing banks are a flaw in QQQ. The fund's rules have arguably helped keep it focused on faster-growing businesses, and its long-term returns show it. But the same rules mean it isn't a complete portfolio on its own, and I'd consider holding it alongside a broader index fund.

Wells Fargo is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Daniel Sparks and his clients have positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, JPMorgan Chase, Mastercard, Microsoft, Nvidia, Oracle, Taiwan Semiconductor Manufacturing, Vanguard S&P 500 ETF, Visa, and Walmart. The Motley Fool has a disclosure policy.