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Buying QQQ vs QQQM

Personal Finance & Money Asked on February 26, 2021

Recently there is a new ETF to track the Nasdaq 100. Its symbol is QQQM. It is very similar to QQQ and it has lower expense ratio. I understand that QQQ is better known and has a smaller spread between the bid and the ask. For somebody who is going to buy and hold for a long period of time, a larger bid ask spread does not seem like a big deal to me.

Other than the larger bid ask spread, is there any other advantage to QQQ over QQQM?

I am in the United States.

2 Answers

Invesco designed the new QQQM to appeal to buy-and-hold investors, while traders and institutional buyers may prefer to stick with the original QQQ.

Let’s explain. For starters, the new fund is cheaper. QQQM (affectionately known as the Q mini) has a lower management fee. Shares of the Q mini are also a fraction of the value of QQQ, putting the mini within reach of small savers who might balk at QQQ’s price tag.

Source

Correct answer by Bernhard Döbler on February 26, 2021

Couple of points that indicates there could be some positives of QQQM.

  • dividend distributions could be treated as qualified dividends than regular income
  • no potential end date
  • lower expense ratio: .15% compared to QQQ's .20%

Only Con seems is : liquidity

Source : seekingalpha article

Answered by puzzled on February 26, 2021

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