Are you interested in investing in the Nasdaq 100 index but confused about whether to choose QQQ or QQQM? In this comprehensive video, we'll delve into the comparison between these two exchange-traded funds (ETFs) offered by Invesco. By the end, you'll have a clear understanding of the differences and be able to make an informed decision on which one suits your investment goals.

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QQQ, which has been around since March 1999, has demonstrated impressive returns, outperforming the S&P 500 by a remarkable 351% over that period. It has weathered significant market events like the tech bubble crash of 2000, 9/11, and the financial crisis of 2008-2009. On the other hand, QQQM is a newer fund, launched in March 2020.

In terms of cost, QQQ comes with a higher price per share, currently standing at $367, which may deter some potential investors. QQQM, however, offers a more affordable alternative, priced at $151 per share. Invesco introduced QQQM to attract investors who find the original QQQ's high price intimidating. With an expense ratio of 0.15%, QQQM also boasts a slightly lower cost compared to QQQ's 0.20% expense ratio, potentially saving you money in the long run.

But why didn't Invesco simply lower the expense ratio for QQQ? While that may seem like a reasonable solution, Invesco is already making significant profits from QQQ's assets under management, which currently amount to a staggering $201 billion. By launching QQQM, Invesco can cater to investors seeking a more cost-effective option while still capitalizing on the success of QQQ.

Now, let's explore the factors that could influence your choice between QQQ and QQQM. If liquidity and spread are crucial considerations for you, QQQ emerges as the better option. It is highly liquid, with substantial daily trading volume, making it easier to buy and sell shares swiftly. On the other hand, QQQM experiences lower trading volume, which can result in wider bid-ask spreads. This can be particularly relevant for short-term traders or those aiming for frequent buying and selling.

However, if you're a long-term investor looking to hold onto your investment for a significant period, the liquidity aspect becomes less significant. In this case, QQQM can offer a more affordable entry point and a marginally lower expense ratio, allowing you to save on fees over time.

It's worth noting that when comparing the performance of QQQ and QQQM, they track the same underlying index, the Nasdaq 100, very closely. Their returns are virtually identical, with only a minimal percentage difference. Therefore, if you prioritize long-term growth and the specific exposure offered by the Nasdaq 100, both QQQ and QQQM can serve your investment needs effectively.

As an investor, it's crucial to evaluate your investment style, goals, and time horizon when deciding between QQQ and QQQM. If you're comfortable with a higher price per share and prioritize liquidity, QQQ may be the better fit. On the other hand, if you prefer a more cost-effective option with slightly lower expenses and are focused on long-term growth, QQQM may be the ideal choice.

Remember, the decision ultimately depends on your preferences and financial situation. As time goes on, QQQM may gain more prominence, and its performance will be assessed alongside other popular ETFs and the broader stock market.

#qqq #qqqm #etfs

Chapters of Today's Video:
00:00 Intro
00:38 INVESCO
00:48 QQQ vs QQQM
01:11 Why Launch a New Fund?
01:35 The Price Action
02:08 The More REAL Reason (Expense Ratio)
03:16 Invesco's Cash Cow
04:10 What Type of Investor Are You?
05:40 Volume Differences

*Disclaimer: Bob is not a financial advisor. Please contact a professional financial advisor prior to making any decisions. Some of the links and other products that appear on this video are from companies in which Bob Sharpe earns an affiliate commission or referral bonus. Bob Sharpe is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.

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