The Invesco QQQ ETF (QQQ) is one of the oldest and is the fifth-largest ETF. Pending shareholder approval, the $350 billion fund is about to get cheaper and modernize.
Yesterday, Invesco filed regulatory documents that notified shareholders of a minor but significant change in its structure. Many QQQ shareholders might not realize that the ETF is unlike 4,000 of its peers. QQQ and a handful of the first ETFs launched in the U.S. are Unit Investment Trusts (UITs) and not open-end funds. This distinct structure has been a limiting factor, in my opinion. Thankfully, Invesco is seeking approval to reclassify the 26-year old QQQ.
Benefits of QQQ’s Potential Revamp
In addition, if QQQ was an open-end ETF, securities lending and dividend reinvestment would be possible. Other changes that would occur include the election of a board of trustees that would replace the Bank of New York Mellon, alongside more frequent shareholder reports.
QQQ’s Savings Plus Liquidity Will Add to Appeal
Following the conversion to an open-end fund, QQQ would still have a slightly higher fee than its younger sibling. The Invesco NASDAQ 100 ETF (QQQM), which launched in October 2020, charges a 0.15% fee. QQQM has $55 billion in assets but has appealed to many long-term investors that want exposure to large-cap growth companies.
However, many investors have long preferred QQQ because of its strong liquidity. QQQ routinely trades more than 40 million shares daily, over 10 times what QQQM trades.
More Than Tech Stocks Inside
While many people think QQQ and QQQM own just information technology stocks, this is not the case. Some may argue that Alphabet, Amazon and Meta Platforms should be categorized as different from Apple, Microsoft and NVIDIA. However, few would likely consider Costco Wholesale, Intuitive Surgical, or Pepsi to be tech stocks. Yet these large-cap growth companies are all holdings in QQQ and QQQM.
Such holdings have helped. As of July 16, QQQ was up 9.3% in 2025. This comes on the heels of gains of 55% and 26% in 2023 and 2024, respectively. Longer-term, QQQ’s record is impressive. According to Morningstar, the large-cap growth fund’s 19% annualized total return over the last 15 years was the best in their 580 fund category. QQQ was in the top third on a three-, five-, and ten-year basis as well.
None of this will change, even if QQQ shareholders approve the change from the existing UIT format. However, if Invesco gets the green light, the future for the innovation ETF looks brighter. If you own QQQ, find your proxy and respond.
For more news, information, and strategy, visit the ETF Education Content Hub.
