Investors eager to own and trade the tech-heavy Nasdaq-100 stock index are getting a larger and potentially cheaper lineup of exchange-traded funds to choose from.
On Wednesday, State Street Investment Management launched its State Street SPDR Portfolio Nasdaq 100 ETF (QNDX). The company said the fund's expense ratio is 0.1%, or 10 basis points.
That beats the price of Invesco's Invesco QQQ Trust Series I ETF, the go-to option for many Nasdaq-100 investors. It has an expense ratio of 0.18%, or 18 basis points. A related Invesco Nasdaq 100 ETF, which also tracks the index but has lower volume than QQQ, uses the ticker QQQM and has an expense ratio of 0.15%.
Industry giant BlackRock is poised to join the fray. In April, the asset-management company filed with the Securities and Exchange Commission to launch the iShares Nasdaq 100 ETF. The filing didn't list potential fees. A company representative didn't respond to a request for comment.
J.P. Morgan Securities analyst Kenneth B. Worthington expects that BlackRock will launch its Nasdaq-100 ETF next month. With the entry of State Street and BlackRock, there is potential for "considerable market share shifts across the ETFs" that track the Nasdaq-100 index, Worthington says in a June 25 report to clients.
He notes the new competition comes amid a tug of war between brokerage firms and asset managers over ETF distribution fees and shelf space on brokerage platforms which provide access to retail investors. Worthington has previously written that some asset managers may use negotiations with brokerage firms as an opportunity to win shelf space and thus market share.
State Street said its new Nasdaq-100 ETF serves investor demand for a low-cost, growth-oriented building block for portfolios. "Investors today are looking for efficiency at the core of their portfolios without sacrificing growth potential," said Anna Paglia, chief business officer at State Street Investment Management. "QNDX has been built with this need in mind, combining low cost with exposure to many of the market's largest and most established growth companies, which may make it a compelling core allocation rather than a tactical position."
Investors have been drawn to the Nasdaq-100 index because it includes some of the largest and fastest-growing publicly traded companies. The tech-heavy index includes Nvidia, Apple, Microsoft. It is expected that SpaceX, which began publicly trading this month, will be added to the Nasdaq-100 as soon as next month.
QQQ dominates. For individual and institutional investors, Invesco's QQQ has long been the way to own and trade those companies via a single fund. The fund is one of the most traded ETFs in the U.S., based on average daily volume, according to the website, which cites data from Bloomberg. The fund's liquidity makes it a go-to for active traders in particular. There is approximately half a trillion dollars in notional options exposure tied to QQQ.
Invesco launched the slightly cheaper QQQM in 2020 as an option for long-term investors who were less interested in daily trading liquidity. QQQM also has a lower share price than QQQ at $294.88 versus $716.38 as of the market close on Thursday. The introduction of QQQM also didn't cannibalize QQQ's growth; the former has $98 billion in assets. QQQ has grown from $100 billion five years ago to more than $480 billion.
"The QQQ innovation suite is a cornerstone of the Nasdaq-100 ecosystem with deep liquidity and global brand recognition," an Invesco spokeswoman said in a statement. "Both the 25-year performance track record and dominant position in the options market will be difficult to displace."
Nasdaq has been selective about licensing out the index to asset managers, but demand for exposure to its namesake index has grown. In April, the company said it decided to expand its partners for exchange-traded fund products in the U.S.
"Expanding access to the Nasdaq-100 is intended to be additive, supporting investors by improving the efficiency, liquidity, and availability of benchmark-linked exposure across markets and product types," the company said in an April statement.
The addition of new Nasdaq-100 ETFs comes at a time of increasing demand for ETFs. Investors have come to prefer ETFs over mutual funds because they can be traded during the day and are more tax efficient.
Investors poured a record $1.5 trillion into ETFs last year. ETFs have attracted $830 billion in new assets as of May, according to data from State Street. Asset managers have been launching a slew of new ETFs, both passive and active products. Flows into ETFs this year could top last year's record of $1.5 trillion.
Write to Andrew Welsch at andrew.welsch@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 26, 2026 08:14 ET (12:14 GMT)
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