QQQ vs. QQQM – Which NASDAQ 100 ETF from Invesco Is Better?

QQQ from Invesco is the most popular ETF out there for the NASDAQ 100 Index. QQQM is new on the scene and tracks the same index. Is one better? I dive into the details here.

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QQQ vs. QQQM – Quick Comparison Table

Before we get into the details of QQQ vs. QQQM, here's the quick comparison table:

Data as of May 2026.

Here's that same comparison table as an image if you want to save or share it:

QQQ vs. QQQM – Video

Prefer video? Watch it here. It's a few years old at this point, so it doesn't contain some of the updated info below.

QQQ vs. QQQM – Index Methodology, Similarities, Differences, Stats, & More

QQQ and QQQM are two ETFs from Invesco that seek to track the same index: the NASDAQ-100. These are the 100 largest non-financial companies by market cap that trade on the NASDAQ exchange.

This index defines itself as companies “on the forefront of innovation.” It is purely large cap growth. As such, it's basically a tech fund at this point due to Big Tech making up such a huge chunk of the market.

QQQ launched in 1999 and was historically structured as a unit investment trust for over 25 years until converting to an open-ended fund in late 2025. UIT is a somewhat archaic legal wrapper that prohibited it from lending securities, reinvesting dividends in real time, and using derivatives. So for over 25 years, this structure quietly cost shareholders a few basis points per year in foregone securities lending revenue and minor dividend cash drag.

In December 2025, Invesco finally got shareholders to approve a conversion to a standard open-end ETF (the same structure QQQM uses), and simultaneously cut QQQ's expense ratio from 0.20% to 0.18%. This conversion and lower fee make QQQ more attractive.

QQQ is one of the most actively traded funds in the world. It has over $450 billion in assets at this point and an average daily volume of over $12 billion. It is the 2nd most traded fund behind SPY. It has grown even more in popularity over the past decade or so due to its market outperformance thanks to the stellar run by Big Tech. It also has a 3x leveraged cousin TQQQ.

If you don't already know, QQQ is not at all a well-diversified fund, and should not replace a broad market index like the S&P 500 as a core holding in a diversified portfolio. Again, it's mostly tech companies; sectors like Utilities, Industrials, and Consumer Staples are all but absent from this fund.

Now let's talk about QQQM. It's an open-ended ETF. It launched in late 2020, over 20 years after its older brother. While it's no slouch in absolute terms, it has a fraction of the assets of QQQ at “only” about $85 billion. QQQ still has most of the name recognition, but QQQM has attracted more assets as time has passed. Zero to $85 billion in 5 years is very impressive, driven by fee-conscious retail investors.

QQQM tracks the same index – the NASDAQ 100. The important differentiator for investors looking to buy and hold this index for the long term is the fee. QQQ has a fee of 0.18%, while QQQM is cheaper at 0.15%. If you're using a tax-advantaged account like a Roth IRA and you currently own QQQ, switch to QQQM. Period. In taxable space, you'd probably want to keep your QQQ shares but just start buying QQQM going forward, as cap gains taxes are likely going to outweigh fee savings.

Day traders and institutions will appreciate the greater liquidity and more active options chains of QQQ. Its daily volume of about $15 billion is far greater than QQQM's roughly $1 billion. Average spread is $0.01 for QQQ versus $0.03 for QQQM.

Other than those differences, these funds can be considered identical at this point – same holdings and same tax treatment.

QQQ vs. QQQM Performance

The performance of QQQ vs. QQQM has played out exactly as we'd expect since QQQM's inception. They've behaved nearly identically, with QQQM's lower fee allowing it to deliver a very slightly greater return:

Why Did Invesco Create QQQM?

So the obvious question is: Why 2 funds for the same index from the same provider?

Invesco's launch of QQQM is a response to the demand from retail investors for lower fees, which has been great for the industry as a whole and can be seen from the likes of Vanguard, Schwab, etc. competing with each other for assets.

Why wouldn't Invesco just lower the fee of QQQ from its historical 0.20% to 0.15% and call it a day?

In short, the seemingly small difference of 0.05% would account for nearly $100 million in revenue annually for them, so Invesco launched QQQM in 2020 as a cheaper alternative to capture cost-sensitive retail investors without disturbing QQQ's institutional and options-trading franchise, which carries high switching costs (embedded gains, existing options positions, margin agreements, risk models built around QQQ's liquidity profile, etc.).

This two-fund strategy lets Invesco keep premium pricing on QQQ while still competing in the retail market. This has been a common move with other funds and other providers as well. Probably smart business moves, albeit confusing at times for retail investors.

QQQ vs. QQQM – The Fee Gap

With QQQ at 0.18% and QQQM at 0.15%, the annual fee gap is now 3 basis points, narrower than the original 5 bps, but still real. Let's translate that into dollars.

On a $10,000 investment: the annual difference is $3 per year. Basically zero.

Where it starts to matter is compounding over long periods. Assuming 8% annual returns before fees, here's how that plays out over time for various scenarios:

Napkin math assuming 8% annual gross return, fees deducted annually, for illustration only.

The old 5-bp gap on a $100k position would have generated roughly $5,000 in savings over 30 years. The new 3-bp gap generates roughly $3,000. Nonzero, but not life-changing.

Bid-ask spread matters more than the fee difference for active traders. QQQ's median bid-ask spread is essentially $0 (fractions of a cent). QQQM's spread is a penny or two per share, which represents roughly 0.02-0.05% of the share price. For someone making a single buy-and-hold purchase, this is negligible. For someone trading in and out multiple times a month, the spread compounds and starts to exceed the fee difference.

This is, again, one reason Invesco can justify maintaining two funds. The price-sensitive retail crowd goes to QQQM, while active traders stay in QQQ.

QQQ vs. QQQM – The Options Market

There is one genuinely significant differentiator left between these two funds that many overlook: the QQQ options market is absolutely massive, and QQQM's is small.

QQQ averages about 5 million options contracts per day in volume. It has daily zero-DTE expirations, strikes from very low to very high, multi-year LEAPS, and bid-ask spreads on popular contracts that are a penny or two wide.

QQQM has listed options, but daily volume across the entire chain is in the hundreds to low thousands of contracts. Strikes are sparse. Spreads are wide. Anyone running a real options strategy on QQQM will get hammered on execution.

This is why virtually every Nasdaq-100-based income ETF – JEPQ, QYLD, QQQI, QQQH, etc. – writes options on QQQ or QQQ-equivalent index baskets, not on QQQM. To state the obvious, this matters for anyone using options on the NDX, but doesn't matter at all for the average long-term retail investor who is just buying the NDX straightforwardly on a regular basis.

In other words, if you are not using options, this entire section is irrelevant to you and your decision between QQQ and QQQM.

Tax Loss Harvesting and Wash Sale Rule

Let's briefly address a glaring tax consideration here: QQQ and QQQM are likely identical enough to trigger the wash sale rule that disallows harvesting a loss.

The details of tax loss harvesting are beyond the scope of this post, but basically you can get a tax break by realizing losses (“harvesting”) but the IRS says you can't do this if you swap the position for another security that is “substantially identical” within 30 days.

The IRS has never explicitly explained what it does or does not consider “substantially identical,” but if two funds of the same structure, from the same provider, with the same holdings, tracking the same index aren't considered “substantially identical,” then I don't know what would be.

That said, I'm not a CPA, so consult yours.

Coming Competition – New Nasdaq 100 ETFs?

New Nasdaq 100 ETFs may be on the horizon. In April 2026, BlackRock and State Street both filed with the SEC to launch their own Nasdaq 100 ETFs.

Proposed ticker for the BlackRock product is IQQ, presumably to match the iShares branding, with the name being the iShares Nasdaq 100 ETF. The ticker for the SPDR Nasdaq 100 product has yet to be named, but its name is listed as the State Street^® SPDR^® Nasdaq 100 ETF.

Since 1999, Invesco has had an effective monopoly on pure cap-weighted Nasdaq-100 trackers thanks to licensing arrangements. That era may now be ending. Invesco's shares dropped about 6% on the news.

If and when these launch at expense ratios lower than QQQM's 0.15%, Invesco may face genuine fee pressure for the first time, which should be good for retail either way. Grab your popcorn.

Update in August 2026: Those ETFs from BlackRock and State Street were indeed approved. Tickers are IQQ and QNDX respectively. Both cost 0.10%, making them cheaper than QQQM. Separate post on them here.

QQQ vs. QQQM – Conclusion

So which is better? It's pretty simple.

If you're a day trader or you're buying a huge block of shares, QQQ is better for the smaller spread, greater liquidity, and deeper options chains.

If you're a retail investor looking to buy and hold the NASDAQ 100 Index, QQQM is better with its lower fee.

The 2025 conversion and fee lowering for QQQ narrowed the gap between these two, certainly, but their remaining differences are still material for their respective audiences.

To reiterate one more reminder, neither of these funds is a substitute for a diversified portfolio. The NASDAQ-100 is heavily concentrated in tech and communication stocks, has a P/E premium over the broad market, and has experienced drawdowns as severe as 80%+ historically. It's a calculated bet on a specific part of the market, not a core holding.

Conveniently, both of these funds should be available at any major broker, including M1 Finance, which is the one I'm usually suggesting around here.

Do you hold either of these ETFs in your portfolio? Let me know in the comments.

Disclaimer:  While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a research report. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. I mention M1 Finance a lot around here. M1 does not provide investment advice, and this is not an offer or solicitation of an offer, or advice to buy or sell any security, and you are encouraged to consult your personal investment, legal, and tax advisors. Hypothetical examples used, such as historical backtests, do not reflect any specific investments, are for illustrative purposes only, and should not be considered an offer to buy or sell any products. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here.