QQQ ETF: The 2025 Fund Change, Nasdaq-100 Rules and an 83% Fall

Michael Whitman · Trading since 2017, full-time since 2020 · YouTube creator, 137K subscribers · Published 2026-11-07

QQQ is the ticker of the Invesco QQQ Trust, which Invesco says was the second most traded US ETF by average daily volume at June 30, 2026.

Search for “QQQ stock” and the quote pages show a price, a 0.18% fee and a top ten. They leave out the three things that most change what a holder actually owns: the fund changed its legal form in December 2025, the index it copies changed its rules in May 2026, and its record includes a fall of more than four fifths.

All three are in the fund’s own SEC filings, and so is every quarterly holdings list since 2019.

QQQ at a glance: Invesco’s Nasdaq-100 fund

QQQ closed 13.63% below its record on November 6, 2026, after a 6.49% drop on November 5. The price was still up 6.80% for 2026.

How it works: the Nasdaq-100 rules and the May 2026 change

QQQ holds the Nasdaq-100 in full. Its December 22, 2025 prospectus says it “invests in all of the securities comprising the Underlying Index in proportion to their weightings.” The index is compiled by Nasdaq, Inc., excludes companies classified as financials, and excludes REITs and SPACs.

The rules changed on May 1, 2026. A prospectus supplement dated April 30, 2026 says the index now takes 100 of the largest non-financial companies “listed on U.S. Nasdaq-affiliated listing exchanges”, where the older text said The Nasdaq Stock Market. The same supplement sets out the calendar:

The general index page, Nasdaq trading, covers trading the index through futures and options; this page is about the fund.

The end of QQQ’s unit trust in December 2025, and QQQ vs QQQM

For more than 26 years QQQ was a unit investment trust. Its N-CSRS for the half-year to March 31, 2026 says that “effective after market close on December 19, 2025,” it became an open-end management investment company. Shareholders approved it on December 19 with 331,529,065 votes for and 15,583,973 against, after the meeting was adjourned twice.

What the old form cost. The August 18, 2025 proxy statement says the trust had to hold dividends it received “in uninvested cash until ultimately such cash is distributed”, which it called “cash drag”, and that it could not lend securities. It set the fee change at a maximum of 0.20% down to 0.18%, an estimated saving of “more than $70 million” based on assets as of July 1, 2025.

QQQM tracks the same index for less. Invesco’s NASDAQ 100 ETF charges 0.15%, or $15 a year on $10,000, against $18 for QQQ. From QQQM’s first close on October 13, 2020 to November 6, 2026, with dividends reinvested:

The gap was $83.25 over six years, a 0.07-point yearly difference, a little more than the 0.05-point fee gap that applied until December 2025. QQQ trades in far larger volume, which matters to traders; for a buy-and-hold account the fee is the difference that shows.

The original data: 28 Invesco filings and the 2023 rebalance

Concentration, from 28 quarterly SEC filings. Invesco files Form NPORT-P every quarter with each holding’s share of net assets. We read all 28 public filings, September 30, 2019 to June 30, 2026, added share classes of one company together (Alphabet’s two), and summed the largest.

The 2023 special rebalance is visible in one quarter. Nasdaq announced on July 7, 2023 that the index would undergo a special rebalance “effective prior to the market open on Monday, July 24, 2023,” based on shares outstanding on July 3, with no companies added or removed.

Nasdaq’s index methodology sets the trigger: a special rebalance may follow when the companies weighing more than 4.5% each add up to more than 48% of the index, and that group is then cut back to 40%. CNBC reported the same 4.5% and 48% limits as the reason in July 2023.

Between the two filings, Microsoft went from 12.92% to 9.48%, Apple from 12.57% to 10.82% and NVIDIA from 6.94% to 4.34%. Our June 30 measure of companies above 4.5% was 46.63%, below 48%; Nasdaq measured the index itself on July 3, so the two need not match.

The S&P 500 caught up on concentration. Over the same quarters the ten largest in Vanguard 500 Index Fund rose from 22.76% to 37.87%, so the gap to QQQ narrowed from 34 points to about 10. On June 30, 2026 QQQ’s ten were NVIDIA 7.60%, Apple 6.67%, Alphabet 6.29%, Micron 5.64%, Microsoft 4.35%, AMD 4.10%, Amazon 4.02%, Tesla 3.30%, Intel 3.04% and Broadcom 2.81%. The quarter-by-quarter table is in the CSV.

QQQ’s falls of 15% or more since 1999, and its record against SPY

Every fall of 15% or more since 1999, on the value with dividends reinvested:

The 2008 crash does not get its own row because QQQ was still below its 2000 high: inside that long hole it fell 53.41% from October 31, 2007 to November 20, 2008, while SPY fell 55.20% from its own 2007 peak. So QQQ holders who bought in 2000 sat through two crashes before getting their money back.

Year by year against SPY, 2000 to 2025, QQQ returned more in 16 of 26 years. The widest gaps ran both ways: 2020 (48.62% against 18.37%), 2023 (54.85% against 26.19%), 2000 (-36.11% against -9.73%) and 2022 (-32.58% against -18.17%). Since September 2010 its yearly volatility was 20.7%, against 17.0% for VOO.

The start date decides the story. From the first close in March 1999, $10,000 grew to $152,434 in QQQ and $92,107 in SPY. From QQQ’s peak on March 27, 2000, the same $10,000 grew to $66,103 in QQQ and $77,288 in SPY, and QQQ is still behind after 26 years. Our 2024 return of 25.58% matches the prospectus figure.

The dividend record was checked against Invesco’s. Yahoo’s QQQ dividend list needed three repairs (one payout missing in September 2020, one entered twice in June 2010, one extra in December 2011); after them, our per-share totals match the distributions in Invesco’s annual reports for every fiscal year from 2006 to 2025.

The daily series is in the total-return CSV.

A worked example: $10,000 in QQQ through the 2022 slump

Take $10,000 bought at the December 31, 2021 close of $397.85, about 25.1 shares, with dividends reinvested.

1. By November 3, 2022 it was worth $6,579.56, $3,420.44 below the purchase.
2. It was back above $10,000 on December 11, 2023.
3. On November 6, 2026 it was worth $16,967.20.

The same $10,000 in VOO, measured the same way, bottomed at $7,593.23 and ended at $16,547.23. QQQ ended a little ahead after falling about $1,000 further on the way, which is the trade in one example.

QQQ’s small quarterly dividends

QQQ pays four times a year, and not much. The four payouts with ex-dates in the 12 months to November 6, 2026 came to $3.091 a share, 0.47% of the closing price. Per share it paid $1.254 in 2016 and $2.795 in 2025. Growth companies keep most of their cash, so the return has come almost entirely from price. Before the 2025 change the cash also sat idle until paid out, the drag the proxy statement described.

When it fails: tech falling together and buying at a peak

When technology falls as a group. About half the fund sat in ten companies on June 30, 2026, most of them technology companies. On November 5, 2026 QQQ lost 6.49% in a session.

When the entry point is a peak. Bought on March 27, 2000, QQQ took until February 20, 2015 to get back, and still trails SPY from that date. Stock market bubbles puts the dot-com top in context.

When “Nasdaq-100” is read as “diversified”. No financial companies, 101 holdings, and caps that apply only at 24% per company each quarter and 15% at the yearly reset. The rules were rewritten in May 2026, so even the definition is not fixed.

When the fee is ignored over decades. 0.18% against QQQM’s 0.15% is $3 a year per $10,000. It is small, and it compounds; expense ratio shows the arithmetic.

Questions people ask

Is QQQ a stock?

No. It is an ETF listed on Nasdaq that holds the Nasdaq-100 companies; each share is a slice of 101 companies as of June 30, 2026.

What is the difference between QQQ and QQQM?

Same index, different fund and fee: 0.18% for QQQ and 0.15% for QQQM. From October 13, 2020 to November 6, 2026, $10,000 grew to $23,072.38 in QQQ and $23,155.64 in QQQM, dividends reinvested.

Did QQQ change in 2025?

Yes. After the close on December 19, 2025 it became an open-end fund instead of a unit investment trust, and its fee fell to 0.18% from a maximum of 0.20%.

What was QQQ’s worst drop?

-82.96% with dividends reinvested, from March 27, 2000 to October 9, 2002. It did not regain the 2000 high until February 20, 2015.

Related

Trading the index rather than holding it is covered in Nasdaq trading, and what it means for a fund to lean on a few names is in concentration risk. For a fund that sells options on the same index for income, see JEPI vs JEPQ, and for how a fall is measured and recovered, drawdown. The S&P 500 fund it is often weighed against has its own page, VOO ETF.

This page is educational, not financial advice. Test every idea on your own charts before risking money.