Investors Will Soon Have Two New Alternatives to Invesco QQQ
Key Points
BlackRock and State Street are launching exchange-traded funds that will compete with QQQ.
- 10 stocks we like better than Invesco QQQ Trust ›
The Invesco QQQ Trust (NASDAQ: QQQ) is an extremely popular exchange-traded fund. It was launched in early 1999 and tracks the Nasdaq-100 index, representing the 100 largest nonfinancial companies listed on the Nasdaq stock exchange.
QQQ offers investors exposure to a wide variety of tech stocks, including the entire artificial intelligence (AI) value chain, from semiconductors to software and cloud computing companies. And it's highly diversified, with only three stocks -- Nvidia, Apple, and Microsoft -- exceeding more than 5% of the fund's assets. It also contains some tech-adjacent consumer discretionary stocks.
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The ETF currently has $372.5 billion in net assets. And it has significantly outperformed both the Nasdaq Composite and the S&P 500 over the past 10 years.
So, it's a bit of a puzzle why other firms haven't copied Invesco and launched their own Nasdaq-100 tracking ETFs.
But now they are.
This week, both BlackRock and State Street filed with the Securities and Exchange Commission to launch their own versions of QQQ, which will break Invesco's monopoly on the Nasdaq-100 ETF category. In fact, they're joining the Nasdaq-100 party because Nasdaq recently expanded access to it.
The Invesco QQQ ETF has been a great way for investors to gain exposure to a tech-heavy portfolio that also includes some consumer discretionary stocks. Now investors will soon have several ways to do that.
Should you buy stock in Invesco QQQ Trust right now?
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Matthew Benjamin has positions in Microsoft. The Motley Fool has positions in and recommends Apple, BlackRock, Microsoft, and Nvidia. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
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