Retirees and Income Investors Missed QQQM’s 108% Return By Focusing On The Wrong Thing

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By Michael Williams Published
Retirees and Income Investors Missed QQQM’s 108% Return By Focusing On The Wrong Thing

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The Invesco NASDAQ 100 ETF (NASDAQ:QQQM) doesn’t generate income the way traditional dividend ETFs do. With a yield of just 0.51%, this fund tracks growth-focused technology companies that reinvest profits rather than distribute them. The modest distributions come entirely from whatever dividends the underlying holdings choose to pay, which explains why income investors typically look elsewhere.

Where the Yield Comes From

The fund’s top three holdings explain much of this income challenge. While Apple (NASDAQ:AAPL | AAPL Price Prediction) and Microsoft (NASDAQ:MSFT) both pay meaningful dividends, NVIDIA‘s (NASDAQ:NVDA) massive 8.47% weighting pays virtually nothing in dividends. This creates an imbalance where the fund’s largest position suppresses overall yield despite representing significant value.

Apple and Microsoft anchor what little dividend income QQQM generates, and both have demonstrated commitment to shareholder returns. Apple has raised its dividend every year for over a decade, reflecting its transition from pure growth to mature cash generator. Microsoft follows a similar playbook with consistent annual increases averaging near 9%, funded by its cloud computing dominance.

These two companies anchor QQQM’s dividend, but they’re exceptions in a portfolio dominated by growth stocks. The fund holds 101 positions, and most either pay no dividend or pay very little. That’s why QQQM’s yield sits well below the S&P 500’s typical 1.8% to 2.0%.

Dividend Safety and Total Return

The dividend’s safety stems from its pass-through structure and operational efficiency. QQQM has maintained consistent quarterly distributions since launching in October 2020, with its low 0.15% expense ratio preserving nearly all income for shareholders. The fund’s massive scale provides the stability to maintain this reliability indefinitely.

But yield alone tells an incomplete story. Over the past year, QQQM has returned 22.3% in total price appreciation. Since inception, the fund is up over 108%. Investors aren’t buying this ETF for income. They’re buying it for exposure to the companies driving technology and innovation, with dividends as a small bonus.

Contact [email protected] for any questions or corrections.

Photo of Michael Williams
About the Author Michael Williams →

I am a long time investor and student of business, and believe finding good companies that can become great investments is the best game on earth. After 20 years of writing and researching the public markets it is clear that individuals have never had more tools and information to take control of their financial lives. From ETFs and $0 commissions to cryptos and prediction markets there has never been a greater democratization of access to investing. 

I write to help people understand the investments available to them so they can make the best choice for their portfolio, whether they're starting out or looking for income in retirement. 

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