BlackRock’s IQQ Cuts Fees, but QQQ Keeps a Trading Edge

BlackRock’s iShares Nasdaq 100 ETF, ticker IQQ, gives investors another way to track the Nasdaq-100, with a lower fee than Invesco’s QQQ. IQQ began trading in July, adding fresh competition to a fund that has long dominated the index’s ETF market.

IQQ’s stated annual expense ratio is 0.12%, but a fee waiver lowers it to 0.10% through July 31, 2027. That equals $10 a year per $10,000 invested during the waiver, compared with $18 for QQQ and $15 for Invesco’s QQQM.

The savings are real but small in dollar terms. After the waiver ends, IQQ’s gross fee is still below both Invesco funds, while State Street’s QNDX already charges 0.10% without a temporary discount.

All four funds track the Nasdaq-100, an index of large nonfinancial companies listed on Nasdaq. That means the lower fee does not give IQQ a different investment mix; the funds’ results should mainly reflect the same index, less each fund’s costs.

Scale remains a major difference. BlackRock listed IQQ’s net assets at about $386 million on September 10. QQQ’s assets were about $499 billion on September 22, giving the older fund a much larger base.

That scale matters most for investors who trade often or use options. QQQ has a much deeper options market, while a buy-and-hold investor may care more about fees and tracking the index. IQQ’s lower cost does not automatically make it the better fit for every account.

Switching an existing holding can also have a cost beyond the fund fee. Selling shares in a taxable account may trigger a capital-gains bill, which can outweigh years of small annual savings. Investors adding new money can compare the funds without selling an appreciated position.

The competition to watch is now between three lower-cost alternatives and QQQ’s entrenched trading activity. IQQ’s fee waiver runs through July 2027; its assets, trading volume and bid-ask spread will show whether it can attract investors beyond the initial launch.