On December 22, 2025, Invesco quietly changed the QQQ vs QQQM debate. QQQ converted from a unit investment trust into a standard open-end ETF, dropped its expense ratio from 0.20% to 0.18%, gained the ability to reinvest dividends and lend securities, and picked up tax-efficient custom basket redemptions.
Every QQQ vs QQQM comparison written before that date is working with the wrong numbers. The fee gap shrank from 5 basis points to 3. The structural disadvantages that made QQQ the “worse version” for buy-and-hold investors? Most of them disappeared overnight.
QQQM still wins on cost. But the margin is thinner than it used to be, and the decision now depends on what you actually do with these funds.
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Dec 19, 2025
Invesco shareholders vote to convert QQQ from a UIT to an open-end ETF. The structural limitation that prevented dividend reinvestment and securities lending is removed.
Dec 22, 2025
QQQ begins trading under the new open-end structure. Expense ratio drops from 0.20% to 0.18% — a 10% fee cut. The QQQ vs QQQM gap shrinks from 5 basis points to 3.
What Changed
QQQ can now reinvest dividends (no more cash drag), lend securities for extra income, and use custom basket redemptions for better tax efficiency. These were all advantages QQQM had from day one.
QQQ vs QQQM Fund Snapshot
QQQ · The Original
Fund: Invesco QQQ ETF
Fee: 0.18% (was 0.20%) · AUM: ~$394B
Price: ~$615 · Volume: ~40M/day
Inception: March 1999 · Yield: ~0.45%
Structure: Open-End ETF (converted Dec 2025)
QQQM · The Cheaper Clone
Fund: Invesco NASDAQ 100 ETF
Fee: 0.15% · AUM: ~$72B
Price: ~$253 · Volume: ~5M/day
Inception: Oct 2020 · Yield: ~0.50%
Structure: Open-End ETF (always was)
Both funds track the Nasdaq-100 Index — the 100 largest non-financial companies on the Nasdaq. Identical holdings, identical weights, identical quarterly rebalancing. The correlation between them is a perfect 1.00. Every zig and zag is the same.
The difference is packaging. QQQ launched in 1999 and became the second-most-traded ETF globally. Institutional desks, options traders, and hedge funds treat it as their Nasdaq proxy — bid-ask spreads measured in fractions of a penny. QQQM launched in 2020 specifically for retail buy-and-hold investors who don’t need penny-tight execution.
What’s Inside Both Funds
Since QQQ and QQQM hold the exact same Nasdaq-100 stocks at the exact same weights, their sector profile is identical. The concentration is heavy: roughly half the portfolio sits in just 10 companies, and technology dominates at over 50%.
QQQ vs QQQM sector allocation. Both funds hold the same Nasdaq-100 stocks at the same weights.
That 51% technology weight is worth understanding. In 2023, when AI hype lifted semiconductor and software names, both funds surged 55%. In 2022, when rising rates crushed high-growth valuations, both lost a third of their value. This concentration is the feature and the risk — and it’s identical in QQQ and QQQM. The only variable in the QQQ vs QQQM comparison is cost and liquidity, not what you own.
For comparison, the S&P 500 (tracked by VOO) has about 32% in technology. If you want Nasdaq-100 returns with less sector concentration, pairing either QQQ or QQQM with a broader fund like SCHD or VOO balances out the tech tilt.
QQQ vs QQQM Year-by-Year: QQQM Wins Every Time
Since QQQM launched in late 2020, it has beaten QQQ in total return every single calendar year. The margins are small, fractions of a percent, but the pattern is consistent. That’s the fee advantage compounding like clockwork.
| Year | QQQ | QQQM | Edge |
|---|---|---|---|
| 2021 | +27.42% | +27.45% | +0.03% |
| 2022 | -32.58% | -32.52% | +0.06% |
| 2023 | +54.85% | +55.01% | +0.16% |
| 2024 | +25.58% | +25.68% | +0.10% |
| 2025 | +20.77% | +20.85% | +0.08% |
Total returns include dividends reinvested. Sources: Yahoo Finance, FinanceCharts. Data as of early 2026.
Over the full 5-year period, $10,000 in QQQ grew to ~$20,180. The same amount in QQQM reached ~$20,250. A $70 gap on $10K, barely noticeable. But scale matters. On $100K over 20-30 years, the fee difference compounds into real money.
Notice that the 2025 edge narrowed to +0.08% — the first full year reflecting QQQ’s lower post-conversion fee. Prior years show wider gaps (0.10–0.16%) when QQQ was still at 0.20%. Going forward, the annual return difference should settle around 0.03%, matching the new fee gap exactly.
The Fee Math: Before and After December 2025
The conversion changed QQQ vs QQQM fee projections by roughly 40%. This is what $50,000 looks like at 10% average annual returns under both scenarios:
| Horizon | Old Gap (5bp) | New Gap (3bp) | Reduction |
|---|---|---|---|
| 10 Years | $580 | $350 | -40% |
| 20 Years | $2,970 | $1,780 | -40% |
| 30 Years | $11,370 | $6,840 | -40% |
Projections assume 10% nominal annual returns on $50K. QQQM at 0.15%, QQQ at old 0.20% vs new 0.18%. For illustration only.
The old $11,370 gap over 30 years dropped to ~$6,840. On $100K, that’s roughly $13,700 saved with QQQM over three decades. Real money, but not the portfolio-altering difference it once was. The QQQ vs QQQM decision has become more nuanced.
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Lower is betterRisk Profile: Same Roller Coaster, Different Ticket Price
Because both funds hold identical Nasdaq-100 stocks, their risk metrics are a mirror image. The only slight difference is in risk-adjusted returns, where QQQM’s lower fee produces a marginally higher Sharpe ratio.
| Risk Metric | QQQ | QQQM |
|---|---|---|
| Max Drawdown (2021–2025) | -35.1% | -35.0% |
| Annualized Volatility (5Y) | 22.4% | 22.4% |
| Sharpe Ratio (5Y) | 0.60 | 0.61 |
| Beta (vs S&P 500) | 1.18 | 1.18 |
| Worst Calendar Year (Since QQQM Inception) | -32.58% (2022) | -32.52% (2022) |
Sources: PortfoliosLab, Morningstar. Data as of early 2026.
A beta of 1.18 means the Nasdaq-100 swings roughly 18% more than the S&P 500 in either direction. When VOO gained 25% in 2024, QQQ and QQQM gained about the same. But in 2022, when VOO dropped 18%, both Nasdaq-100 funds fell 33%. That extra volatility is the trade-off for tech-heavy concentration — and it’s identical whether you hold QQQ or QQQM.
For investors weighing the QQQ vs QQQM risk question specifically: there is no risk trade-off between these two funds. You are choosing between identical exposure at slightly different price points. The decision should come down entirely to cost, liquidity needs, and tax considerations, not risk tolerance, which is the same either way.
When QQQ Still Wins the QQQ vs QQQM Debate
Despite QQQM’s fee edge, three scenarios favor QQQ:
Options trading. QQQ has one of the deepest options markets on the planet — massive open interest, strikes at every dollar, spreads measured in pennies. QQQM’s options chain is thin by comparison. If you’re running covered calls, protective puts, or spreads, QQQ is the only realistic choice.
Large-block execution. QQQ’s bid-ask spread is often $0.01 or less. QQQM runs $0.02–0.05. On a $1M trade, the wider spread costs roughly $140+ per execution. For active traders, those transaction costs erode annual fee savings fast.
Embedded capital gains. Selling QQQ to switch into QQQM triggers capital gains tax. If your position has appreciated significantly since purchase, the tax hit could wipe out a decade of 3-basis-point savings. New money goes to QQQM. Existing QQQ stays put.
📈 QQQ vs QQQM — Live Price Comparison
QQQ vs QQQM: The New Playbook
📰 The New Playbook · Post-December 2025
Both funds track the same 102 stocks. The only question is which wrapper fits your situation.
New money, buy-and-hold →
QQQM. Lower fee (0.15%), lower share price (~$253), no structural compromise. Over 30 years on $50K, you save ~$6,840.
Options or active trading →
QQQ. Unmatched liquidity, tight spreads, deep options chain. The 0.03% fee premium is negligible next to execution quality.
Already holding QQQ →
Stay. The Dec 2025 upgrade made QQQ a much better hold. Selling triggers capital gains tax that likely exceeds years of savings.
The bigger question isn’t QQQ vs QQQM — it’s whether 51% tech concentration fits your risk tolerance. This index lost a third of its value in 2022. Pair either version with broader exposure like SCHD or VOO for balance.
⚠️ Heads up: These projections assume consistent annual returns. The Nasdaq-100 swings wildly — down 32.6% in 2022, up 55% in 2023. Use these numbers directionally, not as guarantees.
Common Questions About QQQ and QQQM
Is QQQM better than QQQ for long-term investing?
For new buy-and-hold positions, yes. QQQM charges 0.15% vs QQQ’s 0.18%, and that 3-basis-point gap compounds into thousands over decades. Both hold the exact same Nasdaq-100 stocks with a correlation of 1.00.
Did QQQ’s expense ratio change in 2025?
Yes. On December 22, 2025, QQQ converted from a unit investment trust to a standard open-end ETF. The expense ratio dropped from 0.20% to 0.18%. QQQ also gained dividend reinvestment, securities lending, and better tax efficiency.
Should I sell QQQ to buy QQQM?
Probably not. Selling triggers capital gains tax on any appreciation, which can easily exceed years of fee savings from the 3-basis-point gap. A better approach: keep existing QQQ and direct new investments into QQQM. For a detailed look at how QQQ compares to the broader market, see our analysis.
Do QQQ and QQQM hold the same stocks?
Identical. Both track the Nasdaq-100 Index — same 102 stocks, same weights, same rebalancing. The top holdings are NVIDIA (8.9%), Apple (7.3%), Microsoft (6.1%), Amazon (4.9%), and Meta (4.0%). About 48% of both funds sits in the top 10 names.
Why is QQQ’s share price higher than QQQM?
QQQ launched in 1999 with 25+ years of price appreciation baked in (~$615). QQQM launched in 2020 at a lower starting point (~$253). The price difference has zero effect on returns — $10,000 in either fund gives identical exposure.
Is QQQ or QQQM better for options trading?
QQQ, by a wide margin. It has one of the deepest options markets of any ETF — massive open interest, tight spreads, and strikes at every dollar. QQQM’s options chain is thin. For covered calls, puts, or spreads, QQQ is the practical choice.
How much does the 3 basis point fee gap actually cost?
On $100,000 at 10% annual returns: QQQM saves about $3,570 over 20 years and roughly $13,670 over 30 years. Meaningful but unlikely to change your retirement outcome on its own. For how this compares to the VOO vs SPY fee gap, see our breakdown.