The most widely held ETF tracking the Nasdaq is the Invesco QQQ Trust (QQQ), with roughly $427 billion in total assets. QQQ tracks the Nasdaq-100 Index, which includes the 100 largest non-financial companies listed on the Nasdaq exchange. If you want broader coverage of the entire Nasdaq stock market, the Fidelity Nasdaq Composite Index ETF (ONEQ) tracks the full Nasdaq Composite, which holds thousands of stocks instead of just the top 100.
QQQ: The Standard Nasdaq-100 ETF
Launched in 1999, QQQ is one of the oldest and most heavily traded ETFs in the world. It charges an expense ratio of 0.20%, meaning you pay $2 per year for every $1,000 invested. The fund tracks the Nasdaq-100 Index, so it holds large-cap tech and growth companies like Apple, Microsoft, Nvidia, Amazon, and Meta, but excludes financial companies like banks and insurance firms.
QQQ trades billions of dollars in volume each day, making it extremely liquid. That tight liquidity keeps the gap between the buy and sell price (the bid-ask spread) very small, which matters if you trade frequently. Institutional investors and active traders gravitate toward QQQ for exactly this reason.
QQQM: A Cheaper Alternative for Long-Term Investors
Invesco launched a second Nasdaq-100 ETF in 2020 called the Invesco NASDAQ 100 ETF (QQQM). It holds the exact same stocks as QQQ in the same proportions, but charges a lower expense ratio of 0.15%. The difference of 0.05% sounds tiny, but on a $100,000 portfolio held for 20 years it adds up to hundreds of dollars in saved fees.
QQQM also trades at a lower share price than QQQ, which can make it easier to invest in round-dollar amounts if your brokerage doesn’t support fractional shares. Trading volume is lower than QQQ, but for someone buying and holding over years rather than day-trading, that’s rarely a problem. If you’re a long-term, buy-and-hold investor, QQQM is the more cost-efficient choice. If you need the tightest possible spreads for short-term trading, QQQ is the better fit.
ONEQ: Tracking the Full Nasdaq Composite
The Nasdaq-100 only captures the top 100 companies. The Nasdaq Composite Index, by contrast, includes virtually every stock listed on the Nasdaq exchange, spanning thousands of companies across all market capitalizations. The Fidelity Nasdaq Composite Index ETF (ONEQ) tracks that broader index.
ONEQ gives you exposure to mid-cap and small-cap Nasdaq-listed companies that QQQ and QQQM leave out. It’s a much smaller fund than QQQ, so it gets less attention, but it’s the go-to option if your goal is to mirror the entire Nasdaq market rather than just its biggest names.
Income-Focused Nasdaq ETFs
Some investors want Nasdaq exposure paired with regular income. The Global X Nasdaq 100 Covered Call ETF (QYLD) holds the same Nasdaq-100 stocks but sells call options on the index each month. Selling those options generates premium income, which the fund distributes to shareholders monthly. That strategy typically produces higher yields than you’d get from the dividends of the underlying stocks alone, especially during volatile markets.
The trade-off is meaningful: by selling call options, QYLD caps its upside. When the Nasdaq-100 rallies sharply, QYLD won’t capture the full gain because the options it sold limit profit above a certain price. You still bear the full downside risk if the index falls. QYLD charges an expense ratio of 0.60%, and similar products like the Invesco QQQ Income Advantage ETF (QQA) and the First Trust Nasdaq BuyWrite Income ETF (FTQI) follow comparable covered-call strategies at expense ratios of 0.29% and 0.76%, respectively.
Leveraged and Inverse Nasdaq ETFs
Leveraged ETFs amplify the daily returns of the Nasdaq-100. ProShares UltraPro QQQ (TQQQ) targets three times the daily return of the index, while ProShares Ultra QQQ (QLD) targets two times. If the Nasdaq-100 rises 1% in a day, TQQQ aims to return roughly 3% and QLD roughly 2%.
Inverse ETFs move in the opposite direction. ProShares UltraPro Short QQQ (SQQQ) targets negative three times the daily return, ProShares UltraShort QQQ (QID) targets negative two times, and ProShares Short QQQ (PSQ) targets a simple negative one times. These are designed for traders who want to profit from or hedge against Nasdaq declines.
The critical detail with all leveraged and inverse ETFs is that they reset daily. Over periods longer than a single day, compounding effects cause returns to drift from the stated multiple. A fund targeting 3x daily returns will not deliver 3x the index’s return over a month or a year. These products are built for short-term tactical trades, not long-term portfolio holdings.
Choosing the Right Nasdaq ETF
- Long-term buy-and-hold investors: QQQM offers the lowest expense ratio at 0.15% and tracks the same Nasdaq-100 as QQQ.
- Active traders needing maximum liquidity: QQQ’s massive daily volume keeps trading costs minimal.
- Broad Nasdaq exposure: ONEQ covers the full Nasdaq Composite, including smaller companies outside the top 100.
- Monthly income seekers: QYLD and similar covered-call ETFs generate higher yields but cap your upside.
- Short-term directional bets: TQQQ (3x long) and SQQQ (3x inverse) are the most popular leveraged options for daily trading.