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

"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) 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."

QQQM produces a low 0.51% yield because it tracks growth-focused technology companies that typically reinvest profits instead of paying dividends. The fund's largest holdings — notably NVIDIA at 8.47% — contribute little or no dividend, while Apple and Microsoft supply most of the modest distributions. The portfolio contains 101 positions, many of which pay little or no dividend, leaving QQQM's yield well below the S&P 500's typical 1.8%–2.0%. QQQM has delivered strong price appreciation (22.3% last year and over 108% since inception) and maintains consistent quarterly distributions with a 0.15% expense ratio.

Read at 24/7 Wall St.