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Invesco NASDAQ 100 ETF

QQQM:NASDAQ

equity ETF | passive | Invesco | Tracks Nasdaq, Inc.

Market Price

US$257.54 (26 Jan 2026)

+17.20% (YoY)

NAV

US$256.45

+0.43% Premium

Yield

0.50%

-15.52% (YoY)

Expense Ratio

15.00%

-57% vs Avg: 35.00%

Box Set (ETF)

⚡ Executive Summary

📊 The Bottom Line

This ETF tracks the NASDAQ 100 index, comprising 100 of the largest non-financial companies listed on the Nasdaq Stock Market. It offers highly liquid and cost-efficient access to growth-oriented US technology and internet giants. The bull case projects NAV reaching US$309.05 (+20%) while the bear case suggests US$206.03 (-20%) over 12-18 months. Small bid-ask spreads make it suitable for various investment strategies.

⚖️ Risk vs Reward

The underlying tech-heavy holdings currently trade at an elevated P/E of 34.74x, reflecting high investor optimism. While the NASDAQ 100 has demonstrated strong performance, its concentration in a few mega-cap technology firms presents a notable risk. Compared to broader market indices, its growth bias can lead to higher volatility. The elevated valuation suggests a balanced risk-reward profile, with significant upside contingent on sustained innovation and earnings growth, counterbalanced by potential for sharp corrections if growth falters or interest rates rise.

🚀 Why QQQM Could Soar

• Continued innovation and widespread adoption of artificial intelligence could drive substantial revenue and earnings growth for the ETF's dominant tech holdings, propelling their stock prices higher by 15-20%.
• Persistent demand for cloud computing and digital transformation initiatives globally would provide a strong secular tailwind for many of the NASDAQ 100 components, boosting overall ETF performance by 10-15%.
• Should interest rates stabilize or decline, growth stocks (which constitute a large portion of this ETF) typically see multiple expansion, potentially adding 10% to 15% to the ETF's valuation.

⚠️ What Could Go Wrong

• Elevated valuations among top tech holdings could lead to a significant multiple compression if earnings growth decelerates or if macroeconomic conditions worsen, causing a 20-25% drawdown.
• Increased regulatory scrutiny, particularly concerning antitrust issues for dominant technology platforms, could introduce uncertainty and limit growth prospects for key companies, potentially impacting the ETF by 10-15%.
• A sustained rise in interest rates could make future earnings less attractive, prompting investors to re-rate growth stocks lower and leading to a 15-20% decline in the ETF's value.

🏢 Fund Overview

What Are You Actually Buying

The NASDAQ 100 Index comprises 100 of the largest domestic and international non-financial companies listed on the Nasdaq Stock Market, focusing on technology, consumer discretionary, and communication services sectors.
These companies are predominantly large-capitalization and growth-oriented, known for innovation, rapid disruption, and often exhibiting high research and development expenditures.
The index offers exposure to companies at the forefront of transformative themes such as cloud computing, artificial intelligence, and digital payments, making it a key benchmark for technology-driven growth.
Unlike the broader market, the NASDAQ 100 explicitly excludes financial companies, concentrating its exposure on other high-growth industries.

Market Dynamics & Outlook

The technology sector, heavily weighted in the NASDAQ 100, is currently experiencing high valuations driven by enthusiasm for artificial intelligence and robust earnings from mega-cap tech firms.
While cloud computing growth is normalizing, investments in AI infrastructure are accelerating, indicating a significant multi-year spending cycle for the sector.
Regulatory pressures, particularly antitrust concerns and data privacy regulations, pose potential headwinds for some of the largest companies within the index.
The sector's long-duration cash flows make it sensitive to interest rate changes, yet it benefits from potential productivity gains and margin expansion through AI adoption.

🎯 Why This Matters

Understanding the NASDAQ 100's current positioning is crucial as its valuations reflect considerable optimism. The index's concentration in a few dominant companies means performance is significantly tied to their success in key growth areas like AI. For investors, this creates both substantial upside potential and amplified risks should market sentiment shift or growth expectations not be met.

📈 Valuation & Analysis

Historical Performance

YTD

+1.10%

+17.20%

Yearly Growth (3Y)

+29.24%

Yearly Growth (5Y)

+13.89%

Yearly Growth (Since Inception)

+14.15%

Current Valuation

As of December 31, 2025, the Invesco NASDAQ 100 ETF's underlying holdings trade at an aggregate price-to-earnings (P/E) ratio of 34.74x and a price-to-book (P/B) ratio of 9.49x. These valuation multiples are notably above the historical averages for the NASDAQ 100, which have typically ranged lower over longer periods, suggesting that the market is pricing in significant future growth expectations. The current trailing P/E of 33.82x for QQQM, as per Yahoo Finance data, further emphasizes this elevated valuation. While high growth sectors often command premium valuations, the current levels indicate that the ETF is trading at the higher end of its historical valuation range, implying a 'fair to expensive' assessment relative to its own past.

The Bull Case - Upside to

AI-Driven Revenue Acceleration

High Probability

If the adoption of AI technologies translates into higher-than-expected revenue and earnings growth for key holdings, the ETF could see a 15-20% appreciation in NAV, reaching approximately US$309.05 over the next 12-18 months. This is based on strong demand for chips, software, and cloud services.

Sustained Tech Innovation Cycle

Medium Probability

A continued cycle of innovation beyond AI, encompassing advancements in cloud computing, cybersecurity, and consumer electronics, could drive organic growth across multiple holdings, leading to an additional 10-15% upside in NAV.

Favorable Macroeconomic Conditions

Medium Probability

A 'soft landing' for the economy with stable growth and moderate inflation, coupled with potential interest rate cuts, would create an environment conducive to growth stock outperformance, potentially adding 10% to the ETF's NAV by boosting investor confidence and P/E multiples.

The Bear Case - Downside to

Valuation Compression on Growth Concerns

Medium Probability

Should earnings growth disappoint or if investors become more risk-averse, the current high P/E multiples could contract significantly, leading to a 15-20% decline in NAV, potentially to around US$206.03, as valuations revert closer to historical averages.

Increased Regulatory Headwinds

Medium Probability

Heightened antitrust enforcement or new regulations impacting large technology companies could limit their market power and profitability, resulting in a 10-15% decrease in the ETF's value as investor sentiment shifts negatively.

Rising Interest Rates and Inflation

High Probability

A resurgence of inflation leading to higher-for-longer interest rates would negatively impact the present value of future earnings for growth stocks, potentially causing a 10-15% correction in the ETF's market price as capital shifts to less rate-sensitive assets.

Risk/Reward Assessment

The risk-reward assessment for QQQM reflects the inherent volatility and growth potential of its underlying NASDAQ 100 holdings. The bull case hinges on the continued execution of technological innovation, particularly in AI, alongside supportive macroeconomic conditions that encourage investor appetite for growth. Should these factors align, the ETF has significant upside, potentially rewarding investors with a 20% gain. However, the current elevated valuations imply that much of this optimism is already priced in. The bear case highlights material risks, including valuation compression if growth expectations are not met, increasing regulatory pressures on tech giants, and the sensitivity of growth stocks to rising interest rates. The fund's concentrated nature amplifies these risks. Investors should weigh the compelling long-term growth story against the potential for short-to-medium term volatility and a possible 20% downside if the market environment turns unfavorable for growth-oriented technology companies. The probability of significant market corrections remains a key consideration given the current macro backdrop.

Peer Comparison

• QQQM offers a lower expense ratio (0.15%) compared to its larger counterpart QQQ (0.20%), making it more cost-efficient for long-term buy-and-hold investors. • While both QQQM and QQQ track the same NASDAQ 100 Index, QQQM is generally preferred for smaller investment amounts and long-term accumulation due to its lower price point and expense ratio, whereas QQQ, with its much larger AUM and trading volume, is favored for active trading. • Compared to broader large-cap growth ETFs like VUG, QQQM provides more concentrated exposure to the technology and internet sectors, offering a higher growth potential but also higher specific sector risk. • QQQM has demonstrated competitive performance against its peers, providing similar or slightly better returns over various periods, especially considering its lower cost structure.

Fund	Expense Ratio	AUM (B)	1Y Return	3Y Return	5Y Return	Yield
Invesco NASDAQ 100 ETF (QQQM) ⭐	15.00%	US$72.5B	17.20%	29.24%	13.89%	0.49%
Invesco QQQ Trust Series I (QQQ)	20.00%	US$406.0B	16.91%	29.24%	13.85%	0.45%
Vanguard Growth ETF (VUG)	4.00%	US$352.4B	19.40%	32.49%	14.62%	0.38%
Fidelity Nasdaq Composite Index ETF (ONEQ)	21.00%	US$9.4B	N/A	N/A	N/A	0.53%

🎯 Why This Matters

This valuation and peer analysis highlights that QQQM provides focused exposure to a high-growth segment of the market, which comes with both significant reward potential and heightened risk. Investors considering QQQM should be comfortable with its growth-centric, tech-heavy portfolio and the associated volatility, recognizing that current valuations demand sustained strong performance to justify their premiums. Reconsideration may be warranted if sector-specific headwinds intensify or if the macroeconomic environment becomes significantly less favorable for growth stocks.

📊 Appendix

Top 10 Holdings (80+ of ETF Value)

#	Ticker	Logo	Name	Sector	Weight
1	NVDA	N	NVIDIA Corp	Technology	8.6%
2	AAPL	A	Apple Inc	Technology	7.0%
3	MSFT	M	Microsoft Corp	Technology	6.4%
4	AMZN	A	Amazon.com Inc	Consumer Cyclical	4.8%
5	TSLA	T	Tesla Inc	Consumer Cyclical	3.8%
6	GOOGL	A	Alphabet Inc Class A	Communication Services	3.7%
7	META	M	Meta Platforms Inc Class A	Communication Services	3.6%
8	GOOG	A	Alphabet Inc Class C	Communication Services	3.4%
9	WMT	W	Walmart Inc	Consumer Defensive	3.0%
10	AVGO	B	Broadcom Inc	Technology	3.0%

Fund Mechanics

How It Works

The Invesco NASDAQ 100 ETF (QQQM) is designed to track the performance of the NASDAQ-100 Index. This index comprises 100 of the largest domestic and international non-financial companies listed on the Nasdaq Stock Market. The fund employs a passive management strategy, investing at least 90% of its total assets directly in the securities that constitute the underlying index. The NASDAQ 100 Index itself is market-capitalization weighted, meaning companies with larger market values have a greater influence on the index's performance. The index is rebalanced quarterly to maintain its weighting and reconstituted annually to ensure it reflects the 100 largest non-financial companies. The ETF utilizes a physical replication method, holding the actual securities of the index, rather than derivatives.

Holdings Breakdown

Number of Holdings

104

Top 10 Concentration

4750.0%

Top 20 Concentration

7104.0%

Turnover Rate

600%

Category	Weight	Description
Technology	51.4%
Communication Services	16.2%
Consumer Cyclical	13.1%
Consumer Defensive	7.8%
Healthcare	5.0%
Industrials	3.3%
Utilities	1.3%
Basic Materials	1.1%
Energy	0.5%
Financials	0.3%
Real Estate	0.1%

Cost Efficiency

Expense Ratio

15.00%

Median Bid-Ask Spread

12.000%

Performance History

Year	ETF Return	Benchmark Return	Tracking Diff	Volatility	Max Drawdown	Sharpe Ratio
2025	20.20%	N/A	N/A	N/A	N/A	N/A
2024	24.90%	N/A	N/A	N/A	N/A	N/A
2023	53.90%	N/A	N/A	N/A	N/A	N/A
2022	-33.00%	N/A	N/A	N/A	N/A	N/A
2021	26.90%	N/A	N/A	N/A	N/A	N/A

Annualized Return Since Inception

14.15%

Detailed Peer Comparison

Ticker	Name	Issuer	Exp Ratio	AUM (B)	1Y	3Y	5Y	Yield	StdDev 3Y	Sharpe 3Y	Spread
QQQM ⭐	Invesco NASDAQ 100 ETF	Invesco	15.00%	US$72.5B	17.2%	29.2%	13.9%	0.49%	15.57%	1.62	12.000%
QQQ	Invesco QQQ Trust Series I	Invesco	20.00%	US$406.0B	16.9%	29.2%	13.8%	0.45%	N/A	N/A	N/A
VUG	Vanguard Growth ETF	Vanguard	4.00%	US$352.4B	19.4%	32.5%	14.6%	0.38%	N/A	N/A	N/A
ONEQ	Fidelity Nasdaq Composite Index ETF	Fidelity Investments	21.00%	US$9.4B	N/A	N/A	N/A	0.53%	N/A	N/A	N/A
Category Average			35.00%	—	13.2%	28.0%	11.9%	N/A	—	N/A	—

Risk Metrics

Beta

1.15

Alpha

5.93

R-Squared

78.01

Standard Deviation

1 Year	3 Years	5 Years	10 Years
N/A	15.57%	N/A	N/A

Sharpe Ratio

1Y	3Y	5Y	10Y
0.77	1.62	0.65	N/A

Sortino Ratio

3 Years	5 Years
1.22	N/A

Maximum Drawdown

1 Year	3 Years	5 Years	Since Inception
N/A	N/A	N/A	N/A

Correlations

Liquidity & Trading

Volume

Avg Daily Shares

6,230,930

Trend

stable

Bid-Ask Spread

Metric	Value
Median (Percent)	12.000%
Median (Dollar)	US$0.31
During Hours	N/A
At Close	N/A
Volatility	moderate

Premium/Discount to NAV

Metric	Value
Current	42.50%
30-Day Average	-2.00%
1-Year Average	N/A
Standard Deviation	N/A
Max Premium (1Y)	N/A
Max Discount (1Y)	N/A

Creation/Redemption Activity

Trend

stable

Net Flows

Period	Net Flow
1 Year	US$0.0M

⚠️ Disclaimer: This ETF research report is for informational and educational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell securities. EC² Invest is not a registered investment advisor. All data is sourced from public sources and may contain errors. Past performance does not guarantee future results. ETF investing involves risk, including possible loss of principal. Always conduct your own research and consult with a qualified financial professional before making investment decisions.