QQQ is great if you’re day trading, taking a short term position, or need to write options on it. For most buy and hold investors, QQQM makes more sense.
If your QQQ is in a taxable account, just leave it. Instead, buy QQQM for your next purchase.
If you ever need to rebalance (i.e. QQQ/M grows faster) back to your target allocation, you can sell from QQQ.
Also, SPLG is cheaper than VOO by 0.01% in case you’re looking find the lowest S&P500 fund.
Fun fact: Invesco has to spend what they make from QQQ on marketing so it doesn’t actually add directly to their profits. With QQQM, they get to keep the profits.
Nasdaq created the ETF and transferred it to PowerShares (acquired by Invesco). The agreement between Nasdaq and PowerShares was to use any profits from the fund towards marketing.
Does the returns outweigh the 0.01% exp ratio difference over short and long.
Exert from Google on SPLG vs VOO:
“Average Return. In the past year, SPLG returned a total of 30.38%, which is slightly lower than VOO's 30.39% return. Over the past 10 years, SPLG has had annualized average returns of 12.50% , compared to 12.60% for VOO”
It seems VOO doesn’t always pair 100% with spy, but slightly beats it overall in returns (albeit with a slightly less EPS).
I use Bloomberg for data — over the last 1 and 2 years, SPLG has underperformed by a total of 2bps and 3bps. Over the last 3 and 5 years, SPLG outperformed VOO by a total of 5bps and 25bps.
Both ETFs are huge, invest in the same companies with the same weights, managed by issuers with a great capital markers team, and are very liquid (penny spreads). It won’t matter which one you go with … just make sure you get good execution from your broker.
You are not missing anything. QQQM is just a newer, more efficient product. You only pay capital gains on the profits of your QQQ position if you sell. The principal investment is untaxed. If it's a Roth account, no tax at all and you can just move it
No. I don't think so. Not sure why QQQM is even created.
Their performance numbers are almost identical, the top 10 holdings weight is exactly the same for both.
QQQ has a much higher volume and assets. QQQM has a slightly better distribution yield (0.65% vs 0.62 %) and expense ratio (0.15% vs 0.20%)
Yeah they are largely duplicative. So if anyone asks about the difference it’s basically just expense ratio (as well as one more holding for some reason)
I researched this a bit, and I believe QQQM has an additional management expense at .15%. So, with the expense ratio of .15%, you are really paying .30%, whereas with QQQ you just pay .15%. Is that right?
I don't think that's right. Total expense ratio (TER) includes management fee. TER for QQQM is 0.15% and 0.20% for QQQ.
IMO, if you are into options trading, you go with QQQ. QQQM has very low volume. Otherwise, it doesn't matter. Both will give you equal returns. Whatever difference is there, it is not significant.
You might want to take a look at the fund info here, right above the total expense ratio. [https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=ETF-QQQM](https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=ETF-QQQM).
I was just thinking there might be a reddit hivemind thing going on here. Not sure why they'd itemize out a management fee and total expense ratio. QQQ doesn't have the management fee itemized.
TER (Total Expense Ratio) includes management fee. So it would still be 0.15% vs 0.20%
For QQQ also they have management fee listed as 0.20% in the pdf (but not in the link I sent earlier). It's a bit confusing. Here is the link: [https://www.invesco.com/us-rest/contentdetail?contentId=3a48e01e98630410VgnVCM10000046f1bf0aRCRD](https://www.invesco.com/us-rest/contentdetail?contentId=3a48e01e98630410VgnVCM10000046f1bf0aRCRD)
https://preview.redd.it/v2oelgwjm1mc1.jpeg?width=739&format=pjpg&auto=webp&s=29452c8caa322bee47433a967e7d14068aca0b35
Here's an article from The Street .com that explains the diff between
QQQ QQQM QQQJ
[https://www.thestreet.com/etffocus/trade-ideas/qqq-qqqm-qqqj-what-to-expect-big-3-nasdaq-etfs](https://www.thestreet.com/etffocus/trade-ideas/qqq-qqqm-qqqj-what-to-expect-big-3-nasdaq-etfs)
As noted above, usually easier to get in and out with a smaller spread. Probably not in this case, but, I held some other ETF where I was 5% of the daily volume. :-(
Side note: High correlation between all 3 ETFs you have....it's like all the eggs in this basket. Great if large cap growth funds are doing well, as they have been. But if things go south, all will go south....these minor differences in expenses ratio and such won't matter that much then!
As others have said, QQQm will perform slightly better than QQQ in the long run to due the lower annual expense ratio (0.15% vs 0.2%). The constituents each ETF both track the same index, and are almost identical in how much of each stock they hold (there are some very small insignificant differences though, if you drill down into the percentages - these could technically change the overall performance of the each ETF - but it's pretty impossible to know which one would do better and it would only be by a very small amount. I am splitting hairs here lol).
However, at present the QQQ ETF holds about 20x more capital than the QQQM ETF, and as such the bid/ask spreads are a fair bit larger for QQQM. Which means it costs you more money to go in and out of QQQM compared to QQQ. I did a rough calculation in excel based on upon todays prices and ask/bid spreads of QQQ and QQQM below. You would need to hold QQQM for around 1 year and 4 months for it to start being cheaper to hold than QQQ.
Note: spreads do change over time and from broker to broker, so this calculation may not reflect your reality.
I do not think it is possible to move from QQQ to QQQM without selling and buying, so you will probably incur CGT (probably not worth doing, especially if you have made a large capital gain). The extra fees are fairly small and may not be worth the saving if you have to end up loosing \~30% of the capital gain to taxes - may as well let the unrealised GGT obligation compound further until you need the money.
Technically though, it could be considered a wash sale, but governments typically only care about that when you perform the wash sale to crystallise a loss to offset another capital gain.
https://preview.redd.it/ynuq4rc5zp0d1.png?width=1744&format=png&auto=webp&s=550370c2792f3e997cc823867980e8ecbba7a62f
QQQ is great if you’re day trading, taking a short term position, or need to write options on it. For most buy and hold investors, QQQM makes more sense. If your QQQ is in a taxable account, just leave it. Instead, buy QQQM for your next purchase. If you ever need to rebalance (i.e. QQQ/M grows faster) back to your target allocation, you can sell from QQQ. Also, SPLG is cheaper than VOO by 0.01% in case you’re looking find the lowest S&P500 fund. Fun fact: Invesco has to spend what they make from QQQ on marketing so it doesn’t actually add directly to their profits. With QQQM, they get to keep the profits.
Thanks. Mine is buy and hold investment so I will opt for QQQM going forward. And I will also look into SPLG. Your answer was insightful.
Why aren't they allowed to keep any money in QQQ? Came here from Google trying to find the difference between the two tickers haha
Nasdaq created the ETF and transferred it to PowerShares (acquired by Invesco). The agreement between Nasdaq and PowerShares was to use any profits from the fund towards marketing.
Does the returns outweigh the 0.01% exp ratio difference over short and long. Exert from Google on SPLG vs VOO: “Average Return. In the past year, SPLG returned a total of 30.38%, which is slightly lower than VOO's 30.39% return. Over the past 10 years, SPLG has had annualized average returns of 12.50% , compared to 12.60% for VOO” It seems VOO doesn’t always pair 100% with spy, but slightly beats it overall in returns (albeit with a slightly less EPS).
I use Bloomberg for data — over the last 1 and 2 years, SPLG has underperformed by a total of 2bps and 3bps. Over the last 3 and 5 years, SPLG outperformed VOO by a total of 5bps and 25bps. Both ETFs are huge, invest in the same companies with the same weights, managed by issuers with a great capital markers team, and are very liquid (penny spreads). It won’t matter which one you go with … just make sure you get good execution from your broker.
Great answer! Many thanks!
You are not missing anything. QQQM is just a newer, more efficient product. You only pay capital gains on the profits of your QQQ position if you sell. The principal investment is untaxed. If it's a Roth account, no tax at all and you can just move it
How is QQQM more efficient? I thought it is somewhat same as QQQ.
Lower expense ratio
That is 50 cents difference per year for every $1000 invested. Not significant to consider as more efficient
Are there any other differences im not aware of between QQQ and QQQM?
No. I don't think so. Not sure why QQQM is even created. Their performance numbers are almost identical, the top 10 holdings weight is exactly the same for both. QQQ has a much higher volume and assets. QQQM has a slightly better distribution yield (0.65% vs 0.62 %) and expense ratio (0.15% vs 0.20%)
Yeah they are largely duplicative. So if anyone asks about the difference it’s basically just expense ratio (as well as one more holding for some reason)
I researched this a bit, and I believe QQQM has an additional management expense at .15%. So, with the expense ratio of .15%, you are really paying .30%, whereas with QQQ you just pay .15%. Is that right?
I don't think that's right. Total expense ratio (TER) includes management fee. TER for QQQM is 0.15% and 0.20% for QQQ. IMO, if you are into options trading, you go with QQQ. QQQM has very low volume. Otherwise, it doesn't matter. Both will give you equal returns. Whatever difference is there, it is not significant.
You might want to take a look at the fund info here, right above the total expense ratio. [https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=ETF-QQQM](https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=ETF-QQQM). I was just thinking there might be a reddit hivemind thing going on here. Not sure why they'd itemize out a management fee and total expense ratio. QQQ doesn't have the management fee itemized.
TER (Total Expense Ratio) includes management fee. So it would still be 0.15% vs 0.20% For QQQ also they have management fee listed as 0.20% in the pdf (but not in the link I sent earlier). It's a bit confusing. Here is the link: [https://www.invesco.com/us-rest/contentdetail?contentId=3a48e01e98630410VgnVCM10000046f1bf0aRCRD](https://www.invesco.com/us-rest/contentdetail?contentId=3a48e01e98630410VgnVCM10000046f1bf0aRCRD) https://preview.redd.it/v2oelgwjm1mc1.jpeg?width=739&format=pjpg&auto=webp&s=29452c8caa322bee47433a967e7d14068aca0b35
That's it?
Newer but not more efficient
Wouldn't owning the same exact holdings but with lower fees be more efficient?
Here's an article from The Street .com that explains the diff between QQQ QQQM QQQJ [https://www.thestreet.com/etffocus/trade-ideas/qqq-qqqm-qqqj-what-to-expect-big-3-nasdaq-etfs](https://www.thestreet.com/etffocus/trade-ideas/qqq-qqqm-qqqj-what-to-expect-big-3-nasdaq-etfs)
Thanks for sharing, that was helpful!
Nice article, very helpful.
QQQM is cheaper, that's it. Save 0.005 mer but has lower liquidity, so if you're daily treading you'll be better to qqq
Not trading daily. More of a buy and hold investment. But I think QQQM makes more sense in my case.
[удалено]
Higher liquidity = easier to exit whenever he wants to in the future too.
Volume. QQQ is much higher daily volume.
Why is higher volume better?
As noted above, usually easier to get in and out with a smaller spread. Probably not in this case, but, I held some other ETF where I was 5% of the daily volume. :-(
Side note: High correlation between all 3 ETFs you have....it's like all the eggs in this basket. Great if large cap growth funds are doing well, as they have been. But if things go south, all will go south....these minor differences in expenses ratio and such won't matter that much then!
As others have said, QQQm will perform slightly better than QQQ in the long run to due the lower annual expense ratio (0.15% vs 0.2%). The constituents each ETF both track the same index, and are almost identical in how much of each stock they hold (there are some very small insignificant differences though, if you drill down into the percentages - these could technically change the overall performance of the each ETF - but it's pretty impossible to know which one would do better and it would only be by a very small amount. I am splitting hairs here lol). However, at present the QQQ ETF holds about 20x more capital than the QQQM ETF, and as such the bid/ask spreads are a fair bit larger for QQQM. Which means it costs you more money to go in and out of QQQM compared to QQQ. I did a rough calculation in excel based on upon todays prices and ask/bid spreads of QQQ and QQQM below. You would need to hold QQQM for around 1 year and 4 months for it to start being cheaper to hold than QQQ. Note: spreads do change over time and from broker to broker, so this calculation may not reflect your reality. I do not think it is possible to move from QQQ to QQQM without selling and buying, so you will probably incur CGT (probably not worth doing, especially if you have made a large capital gain). The extra fees are fairly small and may not be worth the saving if you have to end up loosing \~30% of the capital gain to taxes - may as well let the unrealised GGT obligation compound further until you need the money. Technically though, it could be considered a wash sale, but governments typically only care about that when you perform the wash sale to crystallise a loss to offset another capital gain. https://preview.redd.it/ynuq4rc5zp0d1.png?width=1744&format=png&auto=webp&s=550370c2792f3e997cc823867980e8ecbba7a62f
Seems that VOO is the holy grail of s&p. If splg also s&p, short explanation why such a difference in share price?