QQQ ETF versus QQQM ETF - Which Is Better?
πππThe US markets closed lower today as investors are waiting for the Feds' rate policy decision. QQQ is down 1.89% today while QQQM has also dropped 1.9%.
$Invesco QQQ Trust(QQQ)$
$Invesco NASDAQ 100 ETF(QQQM)$ is similar to QQQ and is also known as a smaller version of QQQ. Both QQQ and QQQM tracks the Nasdaq 100 Index which represents the Top 100 stocks on Nasdaq.
Portfolio wise the Top 10 holdings of QQQ and QQQM are the same. They include $Microsoft(MSFT)$
Amazon, Meta Platforms, Broadcom, Tesla, Google and Costco.
The Top 10 holdings weightage is 47%. Total number of holdings is 102.
The expense ratio for QQQ is 0.20% while QQQQM is 0.15%.
Both QQQ and QQQQM pay dividends every 3 months. While QQQ 's dividend yield is 0.62%, QQQM dividend yield is slightly higher at 0.68%.
QQQ' s Assets Under Management is USD 248.16 billion while QQQM's Assets Under Management is USD 22.64 billion.
Performance wise QQQ is up 5.46% year todate and 31.7% in 2023. QQQM is up 5.42% year todate and 31.85% in 2023.
QQQ versus QQQ - which is better?
It depends on your goal. If you are a trader, QQQ has better liquidity and significantly higher volume and lower spread cost. However if your goal is to buy and hold, QQQM has a lower expense ratio of 0.15% compared to QQQ's 0.20%. The lower expense ratio in QQQM saves investors almost 25% in expenses and in the long term, this could be substantial.
For small investors, the entry point for QQQM is much lower with the last closing price of USD 174.68 per share versus QQQ at USD 424.59.
Ultimately, the bottom line is your goal. Choose QQQ if you like to trade actively. Choose QQQM if you plan to hold long term.
Every investor is different and investing is all about tailoring your portfolio to suit your goal. Since my goal is FIRE - Financial Independence Retire Early, I would choose QQQM.
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Nothing ever comes out good whenever Powell opens his mouth. His delivery always tanks the market.
They both go the same trend
I like holding QQQ