Nasdaq100
Locally we have the Satrix Nasdaq, we all know that one.
Offshore the big Nasdaq ETF we all know is QQQ. But there is another, QQQM.
Both QQQ and QQQM track the Nasdaq 100, both are issued by Invesco. So the same.
BUT; QQQ TER is 0.20% while QQQM TER is 0.15%.
So why did Invesco issue the new QQQM in October 2020 to compete with the QQQ listed in March 1999?
The answer is simple.
The QQQ has assets under management (AUM) is some US$240billion. If they dropped the TER by 0.05% to 0.15% they would give up a quarter of their fee equal to US$120million. a year, forever
So rather then give up all that lovely free fee money, they just issued a new ETF with the exact same characteristics, but a lower TER at 0.15%.
So far QQQM has AUM of only US$21billion.
So, new money into an offshore Nasdaq 100 ETF should go into the new QQQM.
Existing money in QQQ should be moved into QQQM. But consider costs and tax implications as the saving is modest at 0.05%.
| ETF name | Invesco NASDAQ 100 ETF | Invesco NASDAQ 100 ETF |
| Nasdaq code | QQQ | QQQM |
| ETF issuer | Invesco | Invesco |
| Issue date | 10 March 1999 | 13 October 2020 |
| Total investment cost | 0.20% | 0.15% |
| ETF Benchmark | Nasdaq 100 | Nasdaq 100 |
| Tax-free savings account | NO | NO |
| ETF major holdings | Microsoft Corp 8.92% Apple Inc 8.89% Amazon 4.89% NVIDIA Corp 4.48% Broadcom Inc 4.32% Meta 4.14% Alphabet A 2.68% Tesla 2.62% Alphabet C 2.62% Costco 2.33% |
Microsoft Corp 8.92% Apple Inc 8.90% Amazon 4.89% NVIDIA Corp 4.48% Broadcom Inc 4.32% Meta 4.14% Alphabet A 2.68% Tesla 2.62% Alphabet C 2.62% Costco 2.33% |
| Market cap | US$240billion | US$21billion |
| Performance 1 year | +44.5% | +44.6% |
| Performance 3 years | +33.3% | +33.4% |
| Performance 5 years | +162.5% | NA |
| Performance 10 years | +398.7% | NA |
| Dividend yield | 0.5% | 0.6% |
ETF blog
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.
