The PowerShares QQQ (QQQ) , the sixth-largest U.S. ETF by assets will welcome back an old friend soon when Green Mountain Coffee Roasters (GMCR) rejoins the NASDAQ-100, QQQ’s underlying index, later this month.
Vermont-based Green Mountain, the maker of K-Cup and Vue single serve packs, will also join the NASDAQ-100 Equal Weighted Index (Nasdaq:NDXE) and the NASDAQ-100 Ex-Tech Sector Index (Nasdaq:NDXX) prior to market open on Thursday, August 22, 2013, according to a statement by NASDAQ OMX Global Indexes. Green Mountain is replacing biotech firm Life Technologies (LIFE).
At the close of U.S. markets Thursday, Green Mountain’s market value was $11.1 billion. Green Mountain was first added to the NASDAQ-100 in May 2011 only to be dropped from the index in December 2012. However, sometimes being dumped from the NASDAQ-100 is not all bad. Netflix (NFLX) was also dropped from the index at the same time as Green Mountain and both stocks have soared this year.
Assuming Green Mountain’s market cap stays around $11 billion, the stock would only account for a small percentage of QQQ upon reentering the ETF. As one example, semiconductor maker Altera (ALTR) has a market value of about $11 billion and has a weight of just 0.32% in QQQ. [Nasdaq 100 ETF Highest Since November 2000 After Streak]
By joining the NASDAQ-100 Equal Weighted Index, Green Mountain will be eligible for inclusion in the First Trust NASDAQ-100 Equal Weight Index Fund (QQEW) and the Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE) . [Big Changes for QQQ]
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of QQQ.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
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