QQQ is one of the largest global ETFs (exchange-traded funds) on the market. It’s an index of 100 of the top-performing companies on the market and includes companies like Apple, Microsoft, NVIDIA, Adobe, and others. However, Fidelity has its own equivalent of Invesco’s popular ETF. So, what is Fidelity’s QQQ equivalent ETF?
ONEQ is the equivalent QQQ ETF offered by Invesco. Whereas QQQ traditionally only tracks the top-100 NASDAQ companies, ONEQ tracks the top-1,000 NASDAQ companies. Many investors believe that this provides investors with a better ETF option that better represents changes in the market.
In today’s article, I’m going to discuss everything that you need to know about trading ONEQ on Fidelity’s trading platform. I’ll also discuss some of the key differences between Invesco’s QQQ ETF and Fidelity’s ONEQ equivalent ETF. Finally, I’m going to discuss some key information about ONEQ so you can decide whether or not this popularly traded ETF is for you. Let’s take a look!
Trading ONEQ (Fidelity QQQ Equivalent)
Fidelity is one of the most popular brokerage firms in the United States. In addition to offering investment services like mutual and hedge funds, Fidelity also has a fully functional online trading platform that’s similar to those you’d see on apps like Robinhood, Webull, or E-Trade. Once you open up your investment account, you can purchase stocks and ETFs through the platform in accordance with SEC rules.
QQQ is one of the top-rated ETFs in the world. Essentially, it’s a fund that indexes 100 of the top companies listed on the NASDAQ exchange. We’re talking about huge companies like Adobe, Microsoft, and Apple. These companies have a proven track record of strong, consistent growth.
However, the barrier of entry to purchasing these shares is a little bit high as many of them have become quite pricy. The advantage of buying into an ETF fund is that you can take advantage of the combined performance of some of the world’s top-performing companies without having to go through the process of purchasing 100 different stocks individually.
What’s The Difference Between QQQ And ONEQ?
QQQ is an ETF that is organized by Invesco. Although you can purchase the ETF through Fidelity, the brokerage offers an even better alternative known as ONEQ. Fidelity manages ONEQ, and instead of tracking the top-100 companies, it tracks the top-1,000 NASDAQ listed companies.
Although it sounds like a huge difference, the actual payout and growth of the ETF is quite similar to the traditional QQQ ETF, as you can see here. ONEQ has an expense ratio of .21%, while QQQ has an expense ratio of .20%. The only considerable difference in earnings seems to be in dividend payouts. Since ONEQ holds stocks for more companies, the dividend payouts are a bit higher at $.75 cents per share. This is 50% higher than QQQ’s $.50 cents per share payout.
How Long Do You Have To Hold ONEQ ETF Before Selling?
Believe it or not, there are actually no rules that dictate how long an investor must hold an ETF before they’re allowed to sell it. This means that, technically, you could buy into ONEQ and then turn around and sell it the very same day without having any penalties.
The main reason why many investors hold onto their ETFs long-term is for two reasons:
- ETFs that are held for a year or longer are taxed as “long-term capital gains,” whereas ETFs that are held for less than a year are taxed as “short-term gains,” which means your taxes will be a little bit higher.
- ETFs like ONEQ and QQQ aren’t exactly day-trading material. Although they almost always grow and increase over a year, their value doesn’t significantly change daily or even on a weekly basis.
Long story short, if you want to make a profit from an ETF, then your best bet is to plan on holding it for at least a year. It’s not uncommon for some ETFs’ value to rise by upwards of 100% every year. You can’t go wrong with doubling your money every year!
Can You Short Sell ONEQ?
Short selling is the concept of borrowing and selling a stock when you think the market value is about to go down. When the value does go down, you rebuy those same stocks for cheaper, turn a profit, and then give your brokerage firm a small percent of the profits for allowing you to borrow the shares.
If you have a Fidelity trading account set up, you can short sell ONEQ shares. If you feel like the market is about to go down and you want to cash in and turn a quick profit, then short selling could be a good way to get some quick exposure!
Does Fidelity Provide Inverse QQQ ETFs?
An inverse ETF is a fund that moves in the opposite direction of its correlated ETF. For example, an inverse ETF of QQQ would increase when QQQ price decreased. As with short selling, the beauty of inverse ETFs is that you can profit when the market is in a temporary downturn. Although inverse ETFs are considered slightly riskier than long-term stock/ETF holding, Fidelity does allow traders to purchase these inverse ETFs.
Does Fidelity Offer Leveraged QQQ ETFs?
Like Inverse ETFs, leveraged ETF funds give investors a unique way to profit if they’re willing to take a bit of a risk. A leveraged ETF is a fund that increases exponentially as its correlated ETF increases or decreases. For example, one of the largest leveraged QQQ ETFS is ProShares UltraPro Short QQQ ETF (SQQQ). It’s a 3x leveraged inverse ETF, which means that for every 1% QQQ falls, SQQQ increases by 3%.
Last but not least, many people wonder if ONEQ pays dividends like QQQ. The answer is yes, they do! In fact, ONEQ actually pays even higher dividends than QQQ traditionally does. The fund’s last payout was $.75 cents per share, which was 50% higher than QQQ’s $.50 cent payout!