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Q's move to Nasdaq hits Amex

MUTUAL FUNDS REPORTER

The QQQ is now the QQQQ.

The popular exchange traded fund (ETF) of the Nasdaq Stock Market's top 100 companies, which was listed on the American Stock Exchange, has moved to the technology-heavy stock exchange.

The Amex held licence to trade QQQ on its market until June, 2005, but agreed to amend the terms of its deal with Nasdaq. On Dec. 1, the ETF, nicknamed the Q or the Cubes, added a fourth letter to its ticker and began trading on Nasdaq.

Launched in 1999 near the tech bubble's peak, QQQQ is the world's most actively traded security, with an average daily volume of 100 million shares. In Canada, it is a staple of retail and institutional investors alike, including TD Asset Management Inc. and Investors Group Inc.

Holdings of the $23-billion (U.S.) ETFs include this country's Research In Motion Ltd. and ATI Technologies Inc.

"It is the easiest and most convenient way to access tech," said Howard Atkinson, head of public funds at Toronto's Barclays Global Investors Canada.

Market watchers said the Q's move was more bad news for Amex. Over the past 18 months, the third largest U.S. exchange has suffered from technical glitches and ownership issues.

The Q was an "important security for Amex," and its absence will mean a "significant" decline in the exchange's liquidity, said Jodi Burns, a research analyst at Celent Communications of Boston, Mass.

Amex spokesman Daniel Charnas said the exchange will continue to trade the Nasdaq ETF. "It's not so much a matter of where it lists but that it is tradable everywhere," he said.

Historical data suggest December may be a good time to invest in the Q. For seven of the past 10 years, consumer and corporate spending has pushed the ETF up an average of 13.4 per cent in value between September and January, according to technical analyst Don Vialoux.

QQQQ's who's who

The ETF's top-weighted holdings

Microsoft: 8.7%

Qualcomm: 5.8

Intel: 5.1

Cisco: 4.7

Ebay: 3.7

Nextel: 3.0

Dell: 2.7

Amgen: 2.7

Comcast: 2.2

Oracle: 2.1

SOURCE: CBS MARKETWATCH

© 2007 The Globe and Mail. All rights reserved.

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