Invesco QQQ is the Nasdaq-100 fund people trade, not the cheap one

Invesco QQQ Trust, Series 1, QQQ, is the Nasdaq-100 fund people trade. In November 2026 it charges 0.18% a year, and it is not the cheap one. Invesco sells the same index for 0.15%. Two funds that listed in 2026 charge 0.10%, one of them only after a fee waiver.

The portfolio is not the Nasdaq Composite, and it is not a growth screen. It is whatever the Nasdaq-100 weights.

What the Nasdaq-100 includes

The summary prospectus dated Dec. 22, 2025 says the fund seeks to track the investment results, before fees and expenses, of the Nasdaq-100 Index. It is an index fund, not an actively managed one. It uses full replication, so it holds every index security in the index's weights, and it invests substantially all of its assets in those securities.

A supplement dated April 30, 2026 restated the index, effective May 1. The index is designed to include securities of 100 of the largest domestic and international non-financial companies listed on U.S. Nasdaq-affiliated exchanges, based on market capitalization. The rules select for size, that listing and a non-financial business. They do not select for growth.

Weights follow market value, subject to caps. The index is rebalanced after the close on the third Friday in December, and reweighted quarterly in March, June, September and December.

Where the weight sits

In the holdings valued at the Nov. 6 close, the ten largest companies were 49.6% of the fund. Apple was 8.5%, Nvidia 7.7%, Microsoft 6.7%, Alphabet 5.5% across both share classes, Amazon 4.8%, Micron Technology 3.7%, Advanced Micro Devices 3.5%, Tesla 3.2%, Meta Platforms 3.1% and Walmart 2.9%.

At the December rebalance, no single security may be more than 15% of the index. At each quarterly reweighting, no company may be more than 24%, even if it has more than one share class in the index. Apple, one security, is 8.5%. Alphabet's two share classes together are 5.5%. None of the ten is near either limit.

The largest holdings are technology companies, though the rules do not select for that.

On Nov. 6, Space Exploration Technologies, which trades as SPCX, was the eleventh holding, at 2.7%. Nasdaq said it would join the Nasdaq-100 before the open on July 7, 2026.

Invesco's quarterly highlights, published Oct. 28, said the company's free float, the shares available to trade, was below 33% at inclusion, so its full market capitalization was not used for the opening weight. Free float had risen to nearly 24% by the reference date for the September reweighting, and Invesco said that rise dramatically increased the weight.

Invesco's monthly review, published Oct. 26, said the weight rose from 1.28% to 2.82%, effective Sept. 22, after restrictions from the June 12, 2026 initial public offering expired and more shares could be traded.

Direxion NASDAQ-100 Equal Weighted Index ETF, QQQE, tracks an equal-weighted Nasdaq-100 index and charges 0.35%. The concentration in QQQ is the weighting, not the company list.

What the December 2025 conversion changed

Shareholders approved a restructuring on Dec. 19, 2025, and the fund was reclassified as an open-end management company after the close that day. It had been a unit investment trust since it began operating on March 10, 1999. Invesco said open-end trading would begin Dec. 22. The objective stayed the same.

The fee did not. It fell from 0.20% to 0.18%, which Invesco called a 10% reduction. The new structure, Invesco said on Dec. 22, lets the portfolio reinvest income, use futures and lend securities, tools the unit investment trust format did not allow. Invesco said there would be "no tax implications from this conversion for QQQ investors."

The cheaper ways to own the same index

Invesco NASDAQ 100 ETF, QQQM, seeks to track the same index and charges 0.15%. In the latest holdings, the two funds held the same 100 companies at nearly the same weights.

Over the 20 sessions through Nov. 9, QQQ traded $34.7 billion a day and QQQM traded $1.28 billion. That is 27 times the turnover.

Two newer funds seek to track the same index, charge less and trade far less. State Street SPDR Portfolio Nasdaq 100 ETF, QNDX, listed on June 23, 2026, and charges 0.10%. iShares Nasdaq 100 ETF, IQQ, listed on July 8, 2026. Its 0.10% is a net fee. The gross fee is 0.12%, and the waiver runs through July 31, 2027. Over those same 20 sessions, the State Street fund traded $45 million a day and the iShares fund $46 million.

On $10,000, a holder pays $3 a year more for QQQ than for QQQM, and the two funds hold the same 100 companies. QQQM trades about one twenty-seventh as much as QQQ.

That turnover is shares changing hands, not a discount on the fee. Holding QQQ costs that $3 a year whether or not the holder trades.