BlackRock (BLK) "Cheaper than QQQ"...Will IQQ with a 0.1% Total Expense Ratio Gain Traction?

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BlackRock (BlackRock, BLK), the world's largest asset manager, is launching IQQ with a total expense ratio of 0.10% into the Nasdaq 100 ETF market. A colossal competitor has directly challenged the stronghold of Invesco QQQ, which has dominated the market for over 25 years.

According to Barron's, a U.S. investment media outlet, on July 7 (local time), BlackRock is launching the iShares Nasdaq 100 ETF under the ticker IQQ as early as the 9th. This comes just two weeks after State Street (State Street, STT) launched its QQQ competitor, the SPDR Portfolio Nasdaq 100 ETF (QNDX).

IQQ's total expense ratio is 0.12%, but a temporary rate of 0.10% will apply until July 31, 2027. QNDX also has a 0.10% expense ratio. Invesco's (Invesco, IVZ) QQQ charges 0.18%, while QQQM, launched in 2020 for long-term investors, charges 0.15%.

IQQ's initial net asset value is set at $24 per share. BlackRock, State Street, and Invesco products all track the Nasdaq 100 index, which includes Apple (Apple, AAPL), Microsoft (Microsoft, MSFT), Palantir Technologies (Palantir Technologies, PLTR), NVIDIA (NVIDIA, NVDA), SpaceX (SpaceX, SPCX), and others.

Brian Hartigan, Head of Global ETF and Index Investing at Invesco, stated, “We will not underestimate QQQ's 25-year performance record, experienced management team, and global brand recognition.” He added, “QQQ has $500 billion worth of options linked to it, providing deep liquidity that is difficult to replace.”

Kenneth B. Worthington, an analyst at J.P. Morgan Securities, raised the possibility of “significant market share shifts” in the Nasdaq 100-tracking ETF market. As of June 19, BlackRock's iShares holds over 1,700 ETFs and more than $6 trillion in assets worldwide, and has launched 20 funds in the U.S. this year, including IQQ.

[Article Key Summary]

-BlackRock is launching IQQ, which tracks the Nasdaq 100 index, as early as the 9th, applying a total expense ratio of 0.10% until July 31, 2027.

-The total expense ratio for IQQ and QNDX is 0.10%, which is lower than QQQ's 0.18% and QQQM's 0.15%.

-J.P. Morgan Securities raised the possibility of significant market share shifts in the Nasdaq 100 ETF market due to the entry of BlackRock and State Street.

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