Nasdaq100

For tech exposure in the JSE we have the Satrix Nasdaq and a few others such as my preferred, the 1nvest ETF5IT.

Offshore the big Nasdaq ETF is famous 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 0.18% (it used to be 0.20%) while QQQM TER is 0.15%.

Why did Invesco issue the new QQQM to compete with the QQQ?

The answer is simple.

The QQQ has assets under management (AUM) of just over US$480billion. If they dropped the TER by 0.03% to 0.15% they would give up a chunk of their fee equal to US$144million. 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$104billion.

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 0.03%.

Simon Brown

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.