What do the expense ratios mean for QQQ and QQQI?

The expense ratio is the annual fee investors pay for managing an ETF. QQQ has an expense ratio of 0.18%, while QQQI charges 0.68%. This difference means that for every £100 invested, QQQ costs 18p annually, whereas QQQI costs 68p. Over time, lower fees can help preserve more of an investor's capital, although they do not directly indicate investment performance.

How do the inception dates of QQQ and QQQI differ?

QQQ was established on 10 March 1999, providing a long, proven track record across multiple market cycles. In contrast, QQQI launched on 30 January 2024, meaning it has a much shorter history. A longer inception date allows investors to see how a fund has historically behaved during different economic conditions, while a newer fund like QQQI has less data for evaluation.

What are net assets and why do they matter?

Net assets represent the total market value of all the holdings within an ETF. QQQ manages $484.3 billion, indicating very deep liquidity and tight bid-ask spreads for large trades. QQQI holds $14.8 billion, which is still substantial but smaller. Higher net assets generally make it easier to buy or sell shares without significantly moving the price, benefiting investors who trade larger amounts.

How does the dividend yield compare between QQQ and QQQI?

QQQ has a dividend yield of 0.41%, reflecting modest income from the underlying large growth companies. QQQI, however, offers a much higher yield of 13.72%. This significant difference is due to QQQI's use of covered call strategies, which generate premium income. Investors looking for current cash flow might notice this contrast, while those focused solely on growth may prioritise other factors.

What is the impact of covered call strategies on returns?

QQQI uses a covered call strategy to generate its high income. While this boosts the dividend yield to 13.72%, it can cap the potential upside of the underlying NASDAQ 100 exposure during strong market rallies. In contrast, QQQ holds the stocks directly without this overlay, potentially allowing for more participation in significant price increases, though it pays less income.

Are the top holdings similar for both funds?

Yes, the top ten holdings for both funds are very similar. For QQQ, NVDA is 8.52% and AAPL is 7.82%. For QQQI, NVDA is 8.43% and AAPL is 7.77%. The shared list includes NVDA, AAPL, MSFT, MU, AMZN, AMD, GOOGL, META, GOOG, and TSLA. This indicates that both funds provide exposure to the same major large-cap growth and technology companies.

How do expense differences compound over time?

A difference of 0.50 percentage points in expense ratios (0.68% for QQQI vs 0.18% for QQQ) can accumulate over long periods. If both funds achieved identical gross returns, QQQ would retain more of those returns due to its lower fee. This cost drag is a mathematical reality of investing; however, the actual net performance also depends on the strategies used, such as QQQI's derivative income overlay.

What sector concentration risks exist for these funds?

Both funds have significant concentration in technology and communication services, as evidenced by their heavy weighting in companies like NVDA, AAPL, and MSFT. This means their performance is closely tied to these specific sectors. If these industries face regulatory challenges or technological disruptions, both funds could experience increased volatility compared to a more diversified broad-market index fund.

How does fund size affect trading spreads?

Larger funds typically have tighter bid-ask spreads, making them cheaper and easier to trade. QQQ, with $484.3 billion in net assets, is highly liquid. QQQI, with $14.8 billion, is also reasonably liquid but smaller. Tighter spreads mean investors pay less extra per share when buying and receive less discount when selling, which is a practical benefit of high net asset funds.

Which investing goal is each fund typically associated with?

QQQ is generally associated with long-term capital appreciation, tracking the performance of the NASDAQ 100 without an income overlay. QQQI is typically associated with income generation, aiming to provide higher current distributions through its covered call strategy, though this may limit capital growth potential. Investors often choose between these based on whether they prioritise total return or cash flow.

What does 'Derivative Income' mean for QQQI?

The category 'Derivative Income' indicates that QQQI uses financial instruments like options to generate returns. Specifically, it likely sells covered calls on the NASDAQ 100 to earn premiums, which are then paid out as dividends. This strategy differs from QQQ, which falls under 'Large Growth' and holds the actual stocks directly without using options for income.

Does a higher dividend yield mean better performance?

Not necessarily. A higher yield, such as QQQI's 13.72% compared to QQQ's 0.41%, indicates more cash being distributed to shareholders, but it does not guarantee a higher total return. Total return includes both income and capital appreciation. Strategies that boost yield, like covered calls, can reduce potential price growth. Therefore, yield is just one metric to consider alongside risk and growth objectives.

QQQ vs QQQI

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

This page compares Invesco QQQ Trust Series 1 and NEOS NASDAQ 100 High Income ETF on fees, holdings and dividends. QQQ charges 0.18% with a 0.41% yield, while QQQI costs 0.68% and yields 13.72%. Explore how each tracks its market. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

QQQ

Metric

QQQI

0.18%

Expense Ratio

0.68%

0.41%

Dividend Yield

13.72%

$484.28B

Net Assets

$14.80B

104

Holdings

107

Mar 10, 1999

Inception Date

Jan 30, 2024

–

Index Tracked

–

Large Growth

Fund Category

Derivative Income

QQQ costs about $50.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	QQQ	QQQI
NVDANVIDIA Corporation	8.52%	8.43%
AAPLApple Inc.	7.82%	7.77%
MSFTMicrosoft Corporation	5.81%	5.86%
MUMicron Technology, Inc.	5.01%	4.82%
AMZNAmazon.com, Inc.	4.32%	4.29%
AMDAdvanced Micro Devices, Inc.	3.99%	3.90%
GOOGLAlphabet Inc.	3.22%	3.21%
METAMeta Platforms, Inc.	3.12%	3.21%
GOOGAlphabet Inc.	2.97%	2.97%
TSLATesla, Inc.	2.88%	2.91%

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Investment Analysis

QQQ

Pros

Costs only 0.18% annually, significantly lower than many active or derivative strategies for major market exposure.
Commands net assets of $484.3 billion, ensuring deep liquidity and tight trading spreads for large institutional orders.
Established in March 1999, this trust offers a proven multi-decade track record of tracking technology and growth stocks.

Considerations

Yields just 0.41%, making it unsuitable for income-focused investors compared to high-yield derivative strategies.
Holds a concentrated top ten including 8.52% in NVDA, exposing portfolios to single-stock and sector volatility risks.
Provides no regular income distribution; investors rely entirely on capital appreciation from the underlying NASDAQ 100 constituents.

QQQI

Pros

Generates a dividend yield of 13.72%, offering substantial current income through covered call strategies on the NASDAQ 100.
Holds $14.8 billion in net assets, providing sufficient liquidity for most retail and institutional investors trading this ETF.
Targets NASDAQ 100 exposure, mirroring the top holdings of standard growth funds while adding an income overlay.

Considerations

Charges a 0.68% expense ratio, which is notably higher than standard index-tracking equivalents like the 0.18% alternative.
Established only in January 2024, it lacks a long-term track record, leaving the strategy's performance largely unproven.
Covered call strategies typically cap upside potential, potentially underperforming during periods of strong, sustained market rallies.

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About QQQ and QQQI

QQQ (QQQ)

Invesco QQQ Trust Series 1 (QQQ) is a widely traded exchange‑traded fund that seeks to track the Nasdaq‑100 Index, offering concentrated exposure to large non‑financial companies listed on the Nasdaq — think technology, consumer and biotech leaders. It provides a convenient way to gain growth-oriented exposure to a basket of big-cap, often high-growth names, with intraday liquidity like a stock. Investors should know QQQ is relatively concentrated in a handful of large issuers and sectors, which can amplify both upside and downside versus broader-market funds. It pays modest dividends and typically has higher volatility than diversified market-cap indices. As with any ETF, past performance does not predict future returns; values can fall as well as rise. This content is educational and not personalised advice — consider your risk tolerance, investment horizon and diversification needs before investing, and consult a regulated adviser for tailored guidance.

QQQI (QQQI)

The NEOS NASDAQ 100 High Income ETF (QQQI) is a derivative income fund designed to offer investors exposure to the technology-heavy NASDAQ 100 index while generating substantial current income. Launched in January 2024, this ETF holds a diversified portfolio of 107 assets, primarily focusing on large-cap technology and growth companies. Its distinguishing feature is the systematic writing of covered call options on the underlying index, a strategy intended to harvest premium income that is distributed to shareholders. With a reported dividend yield of approximately 13.72%, it appeals to those seeking regular cash flow alongside potential capital appreciation. However, investors should note that the covered call strategy may limit upside potential during strong market rallies. The fund has an expense ratio of 0.68%, which is moderate for a derivative-based product. As with all investments, capital is at risk, and values can fluctuate due to market conditions.

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QQQ vs QQQI

Fund Snapshot