ETF Spotlight: Invesco QQQM Outshines QQQ

ETF Spotlight: Invesco QQQM Outshines QQQ

The younger sibling of the popular QQQ ETF had $2.8 billion in inflows for the first quarter.

Jeff_Benjamin
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Wealth Management Editor
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Reviewed by: etf.com Staff
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Edited by: James Rubin

The $22.2 billion Invesco Nasdaq 100 ETF (QQQM) stood out as one of the bright spots in the Invesco Ltd. first-quarter earnings report this week, which highlighted the 4-year-old fund for its $2.8 billion worth of net inflows.

But let’s not forget about the Invesco QQQ Trust (QQQ), the $245 billion flagship that took in $9.1 billion during the quarter, or more than three times the inflows of QQQM.

It comes down to revenue generation and QQQ doesn’t generate a dime for Invesco.

The distinction between the two ETFs is both interesting and subtle and underscores the hit Invesco suffered in the first quarter when the realities of lower management fees contributed to a decline in quarterly profits at the $1.6 trillion Atlanta-based asset manager.

That brings us to the anomaly of QQQ, which is more than 10 times the size of QQQM and is 33% more expensive at 20 basis points yet contributes nothing to Invesco’s bottom line.

QQQ, QQQM: Mag 7 Exposure

Invesco executives and representatives are keen to boast of the marketing benefits of a high-profile ETF like QQQ, which, like QQQM, offers easy exposure to the popular Magnificent Seven stocks. But the unit investment trust structure of QQQ, dating to its launch in 1999, means the expense ratio is essentially split between the provider of the underlying index, Nasdaq, and the trustee of the ETF, Bank of New York Mellon.

Doubling down on the positive spin of a giant ETF that isn’t generating any profits for the issuer, a company spokesperson described QQQ as among the most liquid equity ETFs in the world, which is used as a trading vehicle for the largest institutions.

A company spokesperson described QQQ, which is a trading vehicle for major financial institutions, as among the world's most liquid equity ETFs.

For the more fee conscious, longer-term investor, the edge goes to QQQM, which gained 36.02% over the past 12 months, compared to a 35.89% gain for QQQ over the same period.

Jeff Benjamin is the wealth management editor at etf.com, responsible for coverage related to the financial planning industry. This includes writing, hosting podcasts, webinars, video interviews and presenting at in-person events.


Jeff is a veteran journalist with more than 30 years’ experience covering the financial markets. He has won more than two dozen national and regional awards for his reporting. He most recently worked as a senior columnist at InvestmentNews where he wrote about investment products and strategies, as well as the broader financial planning industry. Prior to that, Jeff worked as an analyst at Cerulli Associates where he researched and wrote reports on the alternative investments industry. Jeff also worked as a money management reporter at Dow Jones Newswires, where he covered the mutual fund industry.


Based in North Carolina, Jeff is a former Marine and has a bachelor’s degree in journalism from Central Michigan University.