#241: Why I prefer QQQM to QQQ
In this email:
What is QQQM?
What’s the difference between QQQM and QQQ?
Why do I like QQQM better than QQQ?
What is QQQM?
It almost look like one line — that is how equivalent QQQ and QQQM are
In fact, look at how similar the holdings are between QQQ (the traditional Nasdaq-100 index ETF) and QQQM (which only came about in Oct-2020)
What’s the difference between QQQM and QQQ?
QQQM targets retail investors with smaller capital, featuring a lower share price (but still sufficient liquidity)
QQQ has a 0.2% expense ratio, while QQQM has a lower fee level of 0.15%. In other words, you're giving up less of your gains with QQQM.
I like QQQM better
In addition to lower expense ratio, here’s why:
It’s much easier and faster to get to owning 100 shares of QQQM than of QQQ
($20k vs $48.6k at time of writing)
After buying 100 shares of QQQM more easily and affordably, you can start selling covered calls on those shares to generate additional income.
Selling calls means you sell someone else the right to buy your shares at a set price by a certain date, collecting premiums that can boost your overall returns or provide downside protection.
💡 IMO: Usually, the bigger the fund, the lower the expense ratio. QQQ is not only bigger than QQQM, but also higher in expense ratio. QQQM came out in late 2020, and why lose more via higher expense ratio by buying QQQ, despite how much QQQ is advertised…
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