As dominoes fall after Invesco's conversion of QQQ ETF, BlackRock and State Street are filing to finally compete with their own Nasdaq-tracking ETFs

BlackRock and State Street are filing with the federal regulators to break Invesco’s all but exclusive hold on a Nasdaq-100 tracking ETF (QQQ) – a potential bonanza for them even though they are about 27 years late to the party.

State Street Investment Management filed with the Securities and Exchange Commission (SEC) on Tuesday for the SPDR Nasdaq 100 ETF, a day after BlackRock’s iShares filed for its own ETF. 

Even experts are a touch baffled by what took so long and what the repercussions will be at this late date. 

“It is very surprising that the other asset management firms have let Invesco have a monopoly in this area for so long,” says Scott MacKillop, former CEO of First Ascent Asset Management. "This is not some tiny, obscure niche. 

"The NASDAQ 100, although it is about two-thirds weighted to tech, contains a broad group of very substantial companies. I think Blackrock and State Street are late to the game here.

“The fact that Blackrock and State Street waited so long but are now jumping in suggests that something changed in the ecosystem. 

"A likely contributor is the new regulation that will make it easier for interesting new companies to join the index on an expedited basis. They must anticipate too many tasty names to pass up a shot at wresting a piece of the pie away from Invesco.”

Limitations

Zachary Evens, a Morningstar analyst of manager research, says he also has little insight into exactly what cleared the path for BlackRock and State Street.

“We don’t have concrete information for, ‘why now,’ ” he says.

"There’s a lot of speculation going around and it doesn’t seem like there’s a lot, if any, public info right now regarding this Hopefully as these products launch and more is known about those index agreements, we get some more insight into this sudden change.

He adds: "I could see firms wanting to jump on it now because of the promise of a portfolio that includes SpaceX, OpenAI, and Anthropic, but you could’ve said Nvidia (NVDA) was all the rage last year, and they didn’t launch a Nasdaq product in 2025… 

“Plus once those companies go public, they’ll likely be somewhat limited positions in the index because of their expected small float. So the appeal of having them in a diversified [hence dilutive] portfolio may be limited.”

Revenue play

But Scott Smith, a senior researcher at Cerulli, believes the change may be linked to QQQ's conversion from a unit investment trust (UIT) to a modern open-end exchange-traded fund (ETF) last December.

In fact, this conversion may remove the mystery about Nasdaq's new willingness to bring BlackRock and State Street into it orbit, says Smith by email.

“I think the driver was likely that Nasdaq was getting higher revenue through the old UIT structure (as Invesco's revenue was directed to marketing only) than they get in ETF structures,” he says, referring to a Bloomberg article from December.

"Currently, the bulk of that [revenue] is divided between the fund’s trustee—the Bank of New York Mellon—and the provider of the underlying index, which is Nasdaq, while the rest is spent on marketing QQQ. But a conversion would allow Invesco to reorder the revenue breakdown.

“Invesco shares (IVZ) rose as much as 4.3% on Friday morning ahead of the results. As of last close, shares had surged more than 30% since Invesco filed its proxy statement with the SEC in mid-July in anticipation of Friday’s vote.”

An Invesco release published Dec. 19, 2025 adds that the conversion to an open-end ETF adds a revenue stream: “The reclassification also provides the opportunity for Invesco QQQ to reinvest income and participate in securities lending.”

Creating ETF ecosystem

An Invesco spokeswoman emailed a statement to RIABiz:

“Invesco QQQ has been synonymous with innovation for over 25 years, providing investors with deep liquidity and an operational efficiency that closely tracks its Nasdaq-100 index benchmark," it said. 

"Creating a foundational ETF ecosystem does not happen overnight, and Invesco has always taken a long-term view on building and facilitating its development. There is only one QQQ.”

One former executive for one of the big firms named in this article, who asked not to be identified to speak freely, says that it appears the Nasdaq itself changed its calculus on whether to grant licensing exclusively to Invesco.

By making it exclusive, Invesco can maintain its profit margins. Indeed, QQQ charges 18 basis points, which is double or more what ETFs tracking the S&P 500 charge. 

Three ETFs track the S&P 500: SPDR S&P 500 ETF Trust (SPY), iShares Core S&P 500 ETF (IVV), and Vanguard S&P 500 ETF (VOO). The VOO charges just three basis points.

Faster entry

Nasdaq Inc., which manages the indexes, has created a fast-tracking process so that these companies, effective May 1, can enter an index after two weeks rather than three months, according to a a statement.

Further easing entry is a relaxation of a requirement that firms have a 10% float [of outstanding shares] to be eligibile for listing.

“Industry professionals, including asset managers and institutional passive portfolio managers, were mostly supportive of the fast entry proposal and proposed timing,” according to the statement. 

The Nasdaq could be opting for greater distribution by having three ETFs, albeit with likely lower fees, as a better play rather than one with higher fees. 

Invesco has already created a second Nasdaq 100 ETF (QQQM) with a lower fee of 15 basis points, to potentially discourage competition.

Tax-loss harvesting

“It's just a math equation,” the source says.

The source adds that there are bigger factors that enter such negotiations. BlackRock may have offered, for example, the Nasdaq some assurances regarding potential moves to tokenization and other new frontiers.

Indeed, most investors will likely stick with QQQ, experts say, although QQQM, the lower cost version, has pulled in more money than QQQ over the past 12 months. There is a 3 basis-point difference in their fees. 

At the very least, they add, even the most loyal QQQ investors will utilize a second Nasdaq-tracking stock as means of tax-loss harvesting. 

An RIA can sell the QQQ, harvest losses, then pile into a different Nasdaq ETF to avoid missing out on gains during the 30-day wash-rule period. That alone could justify having new ETFs in the market.

Fund breakdown

About 3,500 companies are listed on the broader Nasdaq Composite Index. As of early 2026, the top 10 largest holdings represented over 50% of the total index value, and the top 100 non-financial companies made up about 80% of the index.

The Nasdaq's (Nasdaq-100 Index) total market capitalization of the top 100 non-financial stocks is an estimated to be $33.7 trillion to $40.1 trillion as of early 2026. That makes it a large target to be covered by a single fund firm. See: Grayscale Investments is suing the SEC to get its ETF approved but bitcoin's swoon means 'public sympathy' may swing in favor of the regulator, a rules lawyer says

The downside of index investing, typically, is that gains are limited by diversification – as are losses.

Not so with the QQQ Trust, which tracks the Nasdaq-100 index. 

The Trust compounded near 20% annually over the past 10 years. A $10,000 investment in 2016 would have ballooned to more than $60,000, or about a 500% return.

Fast tracking

Also, consider that once the Securities and Exchange Commission (SEC) allowed ETFs to track Bitcoin, eleven fund companies launched an ETF and the total capitalization of Bitcoin is just $1.52 trillion to $1.54 trillion, with the price hovering around $76,000 per coin. 

In other words, the Nasdaq index is about to attract a whole new world of investors because companies like SpaceX, Anthropic and OpenAI are making noises about IPOs. A world of investors will seek to access them through a Nasdaq-tracking stock.