BlackRock (NYSE: BLK) has made another bold step in the exchange-traded funds sector, and it has targeted one of the most popular and dominant indexes globally.
According to Bloomberg, citing Monday’s official filing, the asset manager has applied with the US Securities and Exchange Commission to debut a Nasdaq- 100 ETF under the IQQ ticker.
With the move, BlackRock takes a direct shot at Invesco’s QQQ ETF, which has dominated the Nasdaq-100 space for over two decades.
If approved, iShares Nasdaq 100 ETF (IQQ) will track some of the top names in growth and tech stocks. Think of Apple, Amazon, Nvidia, and Microsoft.
Why does the filing matter?
Well, Invesco (NYSE: IVZ) has ruled the QQQ territory since launching in 1999. Currently, the index manages assets worth around $300 billion and remains the number one choice for investors interested in concentrated tech exposure.
No other fund has tracked the Nasdaq-100 at scale for more than two decades until now. Has the market matured to a point where it needs another player?
Bloomberg quoted a Nasdaq spokesperson saying:
“As demand for Nasdaq 100 exposure continues to grow globally, Nasdaq is focused on extending international reach and deepening institutional access by working with a select set of partners in key markets.”
Therefore, IQQ would be the first Nasdaq 100 ETF outside Invesco’s management (if approved). I believe that’s what is making this filing significant.
And you know what? BlackRock hardly bothers to dominate crowded territories without a clear goal. And its iShares brand currently dominates the crypto ETFs landscape globally.
For context, BlackRock BTC ETF boasts $63.11 billion in cumulative net inflows as of April 2, with $52.41 billion in net assets. Fedlity’s FBTC comes second with $10.96 billion total inflow and $12.53 billion net assets, according to SoSoValue data.
Why should you care?
Competition is often a healthy signal for retailers. BlackRock’s entry might pressure Invesco to reduce QQQ’s expense ratio from the current 0.20%. iShares funds have historically forced rivals to adjust fees.
Moreover, BlackRock’s filing comes as US-listed exchange-traded funds explore all-time highs of $13.5 trillion. Recent stats show these products have seen historic volumes over the past 47 months, even outpacing COVID times.
Takeaway
This is just a filing, and an official IQQQ launch requires the SEC’s approval. However, the message is clear. BlackRock is targeting one of the remaining monopolies in ETF investment, and Invesco will likely pay attention to the upcoming competition.
