Invesco Monopoly Broken: BlackRock and State Street Launch Cheaper Nasdaq-100 ETFs

Retail investors in Nasdaq-100 ETFs pay hundreds of millions of US dollars too much in fees each year by choosing the wrong fund, even though cheaper alternatives track the same index. The popular Invesco QQQ Trust (QQQ) charges 0.18 percent total expense ratio per year, while the competing products from BlackRock and State Street launched in April 2026 cost just 0.10 percent each – less than half.

Fee differences reach $80 per year

For an investment of $100,000, choosing the established QQQ over the new funds from BlackRock (IQQ) or State Street (QNDX) results in annual additional costs of $80. Invesco's own QQQM, introduced in 2020 with a 0.15 percent fee, is also cheaper than QQQ and saves investors $30 per $100,000 invested.

The total expense ratio (TER) indicates what percentage of assets under management are charged annually for fund administration and operations. For Nasdaq-100 ETFs, the TER ranges between 0.10 percent and 0.30 percent. The difference may seem small at first glance, but it adds up to significant amounts over longer periods and larger volumes.

BlackRock and State Street Break Invesco's Monopoly

In April 2026, BlackRock and State Street filed plans with the US Securities and Exchange Commission to launch competing Nasdaq-100 ETFs. In mid-2026, the products IQQ (BlackRock) and QNDX (State Street) came to market with fees of 0.10 percent each. This ended Invesco's de facto market dominance in Nasdaq-100 index funds, which had existed for decades.

Market observers speak of a "fee war" that is expected to push all expense ratios even lower by year-end. For investors, this means: those who remain invested in the expensive QQQ today forgo cost advantages that can add up to four-figure sums over the recommended minimum holding period of 10 to 15 years.

QQQM: Structurally Superior for Retail Investors

The Invesco Nasdaq-100 ETF (QQQM) is described by experts as structurally superior for 99 percent of investors. Unlike QQQ, which is structured as a Unit Investment Trust (UIT), QQQM has a modern open-end ETF structure. This allows for more efficient reinvestment of dividends and lending of securities to generate additional returns, which is not possible with UITs.

Both funds track the identical Nasdaq-100 Index, which comprises 100 of the largest non-financial US companies with a focus on technology, internet, e-commerce and biotechnology. The heavyweights include Apple, Amazon, Alphabet and Meta. The index achieved a euro-denominated performance of 23.64 percent in 2026 as of 30 September 2026.

Liquidity as the Only Advantage of Expensive QQQ

The QQQ, available since 1999, offers significantly higher trading volume than QQQM or the new competing products. This is primarily relevant for institutional investors who need to trade large positions quickly and without market impact. For retail investors with a buy-and-hold strategy, this factor plays hardly any role.

According to industry observers, the new ETFs from BlackRock and State Street have wider bid-ask spreads – a larger difference between buying and selling prices. This can reduce fee savings for frequent traders. For long-term oriented investors who trade less frequently, the lower ongoing expense ratio remains the decisive factor.

Consider Tax Consequences When Switching Funds

Investors who want to switch from QQQ to a cheaper Nasdaq-100 ETF must account for tax implications. Selling QQQ triggers capital gains tax on realised gains. In Germany, gains from securities sales are subject to capital gains tax of 25 percent plus solidarity surcharge and possibly church tax.

Whether a switch is worthwhile despite the tax burden depends on the individual situation: the amount of unrealised gains, remaining investment horizon and available saver's allowance play a role. For new investments or as part of savings plans, however, there is nothing against choosing the cheaper option.

Concentration in Seven Stocks Increases Risk

Despite 100 positions, the Nasdaq-100 Index is heavily concentrated in a few stocks. The so-called "Magnificent Seven" – a group of leading technology companies – account for almost 40 percent of index performance. This concentration increases clustering risk: losses in individual heavyweights can significantly burden overall performance.

Equal-weight funds like QQQE are gaining importance as an alternative. They distribute weight equally across all 100 index constituents, reducing dependence on a few large corporations. The downside: in bull markets, equal-weight funds participate less in the outsize gains of the index heavyweights.

High Volatility Requires Long Investment Horizon

Nasdaq-100 ETFs are considered suitable for experienced investors who specifically want to invest in US growth stocks. An investment horizon of at least 10 to 15 years is recommended to smooth out higher volatility across market cycles. In bull markets, Nasdaq-100 funds often significantly outperform broader global indices. In corrections, however, they fall more sharply, as growth and technology stocks are more sensitive to interest rate changes and economic concerns.

The QQQ has achieved a cumulative return of approximately 20,000 percent over its 40-year history, equivalent to an average of 14.2 percent per year. This long-term performance puts the significance of fee differences in perspective – but does not make them irrelevant. Over decades, even tenths of a percentage point can noticeably reduce net returns.

Conclusion: New Competition Forces a Review of Fund Selection

The market entries of BlackRock and State Street have fundamentally changed the Nasdaq-100 ETF market. Investors should review their positions: those who invest long-term and do not rely on maximum trading liquidity will find cheaper alternatives to the established QQQ in QQQM, IQQ or QNDX. For new investments, choosing one of the cheaper products is clearly preferable from a cost perspective, unless there are individual reasons to the contrary.