QQQM and QQQ are both exchange-traded funds (ETFs) that track the Nasdaq-100 Index, which is a stock market index of 100 of the largest non-financial companies listed on the Nasdaq Stock Market.
QQQM is a newer ETF than QQQ, and it has a few key differences that may make it a better choice for long-term investors.
- Lower Expense Ratio: QQQM has a lower expense ratio than QQQ, which means that it is slightly cheaper to own. This is because QQQM invests in fractional shares of Nasdaq-100 stocks, which allows it to achieve better diversification than QQQ, which invests in whole shares of stocks.
- Higher Dividend Yield: QQQM has a higher dividend yield than QQQ, which means that it pays out a higher percentage of its profits to shareholders. This can be beneficial for long-term investors who are looking for income from their investments.
- Better Long-Term Performance: QQQM has outperformed QQQ over the long term, which suggests that it may be a better investment for long-term investors.
Here is a table that summarizes the key differences between QQQM and QQQ:
| Feature | QQQM | QQQ |
|---|---|---|
| Expense Ratio | 0.02% | 0.20% |
| Dividend Yield | 0.31% | 0.22% |
| Long-Term Performance | Outperforms QQQ | Underperforms QQQ |
Overall, QQQM is a better choice for long-term investors than QQQ. It is slightly cheaper, has a higher dividend yield, and has outperformed QQQ over the long term.
Here are some additional reasons why QQQM may be a better choice for long-term investors:
- QQQM is more tax-efficient than QQQ. This is because QQQM uses fractional shares, which can help to reduce capital gains distributions.
- QQQM is more liquid than QQQ. This is because QQQM has a higher trading volume, which means that it is easier to buy and sell shares.
Of course, there are also some potential drawbacks to QQQM. For example, QQQM is more complex than QQQ, and it may not be suitable for all investors. Additionally, QQQM is more likely to be affected by liquidity issues than QQQ.
Ultimately, the best ETF for you will depend on your individual circumstances and investment goals. If you are a long-term investor who is looking for a low-cost, high-yield ETF with a proven track record of performance, then QQQM may be a good option for you.