Best Nasdaq 100 Index ETFs to Watch in 2025

Below, we’ll examine a selection of popular and well-regarded Nasdaq 100 Index ETFs, highlighting their key characteristics to help you make informed investment decisions. We will consider factors such as expense ratios, top holdings, and reasons to consider each ETF.

• Expense Ratio: 0.2%
• Top Holdings: Apple, Microsoft, Amazon, NVIDIA, Meta Platforms (these are typically the top holdings, but can fluctuate).
• Why Consider It? QQQ is the most popular and liquid Nasdaq 100 ETF, offering broad exposure to the index. It’s an excellent choice for investors seeking core exposure to large-cap growth stocks.

• Expense Ratio: 0.15%
• Top Holdings: Apple Inc., Microsoft Corporation, Amazon.com, Inc., NVIDIA Corporation, Alphabet Inc. Class A, Alphabet Inc. Class C, Meta Platforms, Inc. Class A, Tesla, Inc., Broadcom Inc., PepsiCo, Inc.
• Why Consider It? The ETF tracks the NASDAQ-100 Index, which includes 100 of the largest domestic and international non-financial companies listed on the Nasdaq stock exchange, providing investors with access to prominent firms across various sectors. With a total expense ratio of 0.15%, QQQM offers a cost-efficient way to gain diversified exposure to major companies without the need to purchase individual stocks.

• Expense Ratio: 0.95%
• Top Holdings: Derivatives designed to achieve 3x the daily return of the Nasdaq 100 Index.
• Why Consider It? TQQQ is a leveraged ETF, aiming for 3x the daily performance of the Nasdaq 100. It’s suitable for sophisticated investors seeking amplified returns (and willing to accept amplified risks) over short periods. Important: Leveraged ETFs are not intended for long-term holding.

• Expense Ratio: 0.95%
• Top Holdings: Derivatives designed to achieve 2x the daily return of the Nasdaq 100 Index.
• Why Consider It? QLD provides 2x the daily return of the Nasdaq 100. Similar to TQQQ, it’s designed for short-term tactical trading and carries significant risk. Not for long-term holding.

• Expense Ratio: 0.95%
• Top Holdings: Derivatives designed to achieve -3x the daily return of the Nasdaq 100 Index.
• Why Consider It? SQQQ is a leveraged inverse ETF, seeking -3x the daily performance of the Nasdaq 100. It’s designed for short-term hedging or speculation on a decline in the Nasdaq 100. Extremely risky and not for long-term holding.

• Expense Ratio: 0.95%
• Top Holdings: Derivatives designed to achieve -1x the daily return of the Nasdaq 100 Index.
• Why Consider It? PSQ provides -1x the daily return of the Nasdaq 100, useful for those who want a basic way to bet against the tech-heavy index.

• Expense Ratio: 0.95%
• Top Holdings: Derivatives designed to achieve -2x the daily return of the Nasdaq 100 Index.
• Why Consider It? QID provides -2x the daily return of the Nasdaq 100, useful for those who want a more aggressive way to bet against the tech-heavy index.

• Expense Ratio: 0.79%
• Top Holdings: This holds options contracts on the Nasdaq 100
• Why Consider It? NJUN is a “buffer” ETF, which is designed to provide a defined level of downside protection over a specific period (in this case, one year), while still participating in some of the upside potential of the Nasdaq 100. The buffer comes at the cost of capping potential gains. This is reset annually around June.

Discover the capabilities of InvestingPro for evaluating Nasdaq 100 Index ETFs. Access in-depth analysis of Nasdaq 100 Index ETFs, easily compare expense ratios, 1-year, and 5-year returns: InvestingPro provides real-time data, historical performance charts, and advanced analytical tools to help you make smarter investment choices. With InvestingPro, you can screen ETFs based on various factors, including expense ratios, trading volume, and holdings diversification, empowering you to identify the funds that best align with your investment goals.

Investing in Nasdaq 100 Index ETFs is generally considered a sound strategy for investors seeking broad market exposure, diversification, and relatively low risk. However, it’s crucial to assess your financial goals, risk tolerance, and time horizon before investing.

• Exposure to Growth: Provides access to leading growth companies, primarily in the technology sector.
• Diversification (Within Tech): Offers diversification across 100 large-cap non-financial companies.
• Liquidity: Highly liquid, making it easy to buy and sell shares.
• Variety of Strategies: Offers a range of ETFs, including leveraged, inverse, and buffered options, to suit different risk tolerances and investment goals.
• Relatively Low Cost (for unleveraged ETFs): Expense ratios are generally reasonable for index-tracking ETFs (though higher for leveraged/inverse ETFs).

• Sector Concentration: Heavily concentrated in the technology sector, which can make it vulnerable to sector-specific downturns.
• Overvaluation Risk: Growth stocks can sometimes become overvalued, leading to potential corrections.
• Leverage Decay (for leveraged ETFs): Leveraged and inverse ETFs are not suitable for long-term holding due to the effects of daily compounding, which can erode returns over time.
• Cap on Upside Potential: Buffered ETFs limit your potential gains.

Choosing the right Nasdaq 100 Index ETF requires careful analysis and consideration of several factors. Here are some essential steps to help you find the top Nasdaq 100 Index ETFs for your investment needs:

Examine the top holdings to ensure they align with your investment thesis. Understand the sector weighting of the ETF.

Lower expense ratios improve long-term returns. However, balance the expense ratio with the fund’s strategy and tracking performance. Use InvestingPro to assess and compare expense ratios.

Assess the historical performance of the ETF and its tracking error relative to the Nasdaq 100 Index. Ensure sufficient trading volume for easy entry and exit. Within InvestingPro you can find and compare the performance across ETF benchmarks.

Determine whether you seek simple index tracking, leveraged exposure, inverse exposure, or a buffered approach. Choose an ETF that matches your investment goals and risk tolerance. Carefully consider the risks associated with leveraged and inverse ETFs.

It’s an index comprising 100 of the largest non-financial companies listed on the Nasdaq Stock Market.

A leveraged ETF seeks to amplify the returns of an underlying index, typically by 2x or 3x. However, it also amplifies losses and is not suitable for long-term holding.

An inverse ETF seeks to profit from a decline in the underlying index. It is also designed for short-term trading and carries significant risk.

Buffered ETFs seek to provide a set amount of downside protection at the cost of limiting some upside potential.

No. These ETFs are designed for short-term tactical trading and are subject to significant erosion of value over time due to the effects of daily compounding.

Amplified losses, volatility, and the potential for significant erosion of value over time. They are not suitable for buy-and-hold investors.

Consider your investment goals, risk tolerance, and time horizon. If you seek broad market exposure, QQQ may be suitable. If you seek amplified returns or hedging, consider leveraged or inverse ETFs (but understand their risks). Buffered ETFs may be suitable for risk-averse investors.