The Same Nasdaq-100 Companies, Two Very Different Results

QQQ and JEPQ both invest in the Nasdaq-100, but they are built for opposite jobs. QQQ, the Invesco QQQ Trust, holds every Nasdaq-100 stock at its index weight and keeps all of the index’s gains, paying very little income. JEPQ, the JPMorgan Nasdaq Equity Premium Income ETF, holds mostly the same companies but sells Nasdaq-100 call options to pay around 12% a year in monthly income, giving up part of the gains in return.

From JEPQ’s launch on 3 May 2022 to 30 September 2026, the Nasdaq-100 returned 22.03% a year and JEPQ 16.89% a year. In return, JEPQ’s 12-month rolling dividend yield was 11.87% on 10 November 2026, against a 30-day SEC yield of 0.42% for QQQ on 11 November 2026. That is the whole trade in two numbers.

Choosing between these two funds is not a choice between technology and something else. It is a decision about how much of the Nasdaq-100’s growth you are prepared to sell for monthly income, at what tax cost, and most investors make it on a single headline number. FRC’s research-driven How to Invest in JEPQ and How to Invest in QQQ courses each take you through one side of that trade from the fund’s own SEC filings, so you choose with the full picture. Know what you own before you buy another share.

Open either course page, watch its short video and decide for yourself which fits your goals. Neither course asks for academic qualifications; both are open to anyone who invests or plans to.

For each fund on its own, see FRC’s complete guides to what JEPQ is and what QQQ is.

QQQ vs JEPQ at a Glance

In plain terms, QQQ is a growth fund that pays almost nothing, and JEPQ is an income fund that grows more slowly. Both rise and fall with the same group of large technology companies.

How Each Fund Works

QQQ uses full replication: it owns every stock in the Nasdaq-100 at its index weight and follows every index change. It sells no options and uses no leverage. Since 22 December 2025 it has traded as an open-end fund, after shareholders approved its conversion from a unit investment trust.

JEPQ is actively managed by a J.P. Morgan team. It holds a portfolio of mostly Nasdaq-100 stocks and puts up to 20% of its assets into equity-linked notes from banks, which carry sold one-month, out-of-the-money calls on the Nasdaq-100. On 30 June 2026, the notes were about 16.3% of the fund and supplied about 94.8% of its investment income.

They Own Almost the Same Companies

On 30 June 2026, 74 of JEPQ’s 94 stocks were also held by QQQ. Those shared stocks made up 78.2% of JEPQ and 93.4% of QQQ, and with the notes tied to the Nasdaq-100 itself, about 94.5% of JEPQ was linked to QQQ’s companies or to the index.

JEPQ holds most large names slightly below their index weight. The 20 stocks it holds outside QQQ made up only about 4.1% of the fund, including Mastercard, Oracle and Uber.

Returns: Growth Against Income

JEPQ is measured against the Nasdaq-100, the index QQQ tracks. The calendar years below are total returns with distributions reinvested.

QQQ’s own NAV return runs just below the index each year, roughly by its fee. JEPQ trailed the Nasdaq-100 in every full calendar year, by almost 19 points in 2023 and by about one point in 2024. For QQQ’s full record since 1999, see FRC’s QQQ performance history.

What That Meant in Dollars

As a hypothetical, $10,000 at JEPQ’s launch with everything reinvested grew to about $19,904 in JEPQ and about $24,064 in the Nasdaq-100 by 30 September 2026. The gap of about 5 points a year became roughly $4,160 in under four and a half years.

Over shorter windows the gap was wider. To 30 September 2026, JEPQ returned 19.45% over one year and 21.84% a year over three years, against 24.00% and 28.31% for the Nasdaq-100.

Income: Monthly Cash Against Almost None

JEPQ’s 12 payments with ex-dates from 1 December 2025 to 2 November 2026 totalled $6.94823 a share. QQQ paid $2.84 a share in its fiscal year to 30 September 2025, on a share price many times higher.

As a hypothetical, $100,000 in JEPQ at the 10 November 2026 price of $55.82, using the last 12 payments, would have produced about $12,444 of income over a year. At QQQ’s 0.42% SEC yield, the same $100,000 would point to about $420.

JEPQ’s payments change every month: single payments have ranged from $0.33975 to $0.70497 a share. For how JEPQ’s yield is measured and how far it has moved, see FRC’s guide to JEPQ’s dividend yield.

You Are Not Choosing Companies, You Are Choosing a Trade

QQQ and JEPQ own almost the same companies. The decision you are really making is not which companies to own, but how much of their growth you are willing to sell for monthly income, and most investors make it without knowing the price.

Buy JEPQ for the yield without understanding the trade, and you may find you gave up about 19 points of a 55% rally and handed most of the income back in tax. Buy QQQ for the growth without understanding its history, and you may be holding a fund whose index once fell about 83% and took until 2015 to recover. Both outcomes are in the funds’ own filings for anyone who reads them.

FRC’s How to Invest in JEPQ and How to Invest in QQQ courses put those filings in front of you before you commit. You’ll see how each fund is built, every year and every fall in its record, how its income and gains are taxed, and how investors combine the two. You’ll finish each course with your own written plan, and learners who pass the final examination receive an FRC Certificate of Completion. Get started for a fraction of what you’re about to invest.

The right mix also depends on the rest of your portfolio. ETF Investing for Beginners shows you how to compare any ETF on cost, risk and return. ETF Investing Strategies shows you how growth and income funds work together, and Advanced ETF Investing takes you into options-based funds, after-tax returns and portfolio construction.

Risk: Smaller Swings, Similar Falls

JEPQ has swung less than the index. Over the three years to 30 September 2026, its standard deviation was 11.26 against 17.24 for the Nasdaq-100, so it moved about two-thirds as much.

J.P. Morgan’s fact sheet also gives JEPQ a 3-year beta of 0.61, measured against the market as a whole; the sheet does not name the index used. Beta figures for JEPQ and QQQ on other websites often differ, because each site picks its own index and time period, so compare like with like before drawing conclusions.

In a sudden fall, though, the difference shrinks. In early 2025, JEPQ’s price fell about 21.6% while the Nasdaq-100, measured on QQQ’s share price, fell about 22.9%, so JEPQ fell about 94% as far.

Notice the last row. After the 2025 fall, QQQ’s price was back at its high by 24 June 2025, while JEPQ took until 8 August 2025, even counting its income. Capped upside slows the recovery as well as the rally.

Extra Risks Inside JEPQ

JEPQ adds risks QQQ does not have. Its notes are unsecured promises from banks: on 30 June 2026, 15 notes from five banks made up about 16.3% of the fund. It is actively managed, with 174% turnover in the fiscal year to 30 June 2026, and it is legally non-diversified.

QQQ’s risk is simpler but larger: full exposure to the Nasdaq-100, whose top 10 holdings were 46.68% of the fund on 30 September 2026. For the full list of JEPQ’s risks, see FRC’s guide to whether JEPQ is safe.

Cost: Fees Are the Smaller Gap

QQQ charges 0.18% a year, or $18 on every $10,000; JEPQ charges 0.35%, or $35. On $50,000, that is $90 a year against $175.

The fee difference explains only a small part of the return gap. Most of JEPQ’s shortfall against the index comes from the sold calls, not the fee.

Tax: Where the Two Funds Differ Most

QQQ’s income is small and, for its fiscal year to 30 September 2025, 100% of its ordinary dividends were designated qualified. It paid no capital gains distribution, so most of its return is an unrealised gain, taxed only when you sell.

JEPQ’s income is large and mostly ordinary. Only 5.10% of its distributions for tax year 2025 were qualified. As a hypothetical, a single filer at 22% on ordinary income and 15% on qualified dividends would owe about $216 of federal tax on $1,000 of JEPQ income in a taxable account.

That difference is why many investors who hold both keep JEPQ in a tax-advantaged account and QQQ in a taxable one. The best arrangement depends on each investor’s accounts and tax position.

Holding Both: What a Mix Actually Changes

Some investors hold QQQ and JEPQ together, to keep some growth while drawing some income. The table below shows a hypothetical 50/50 mix of JEPQ and the Nasdaq-100, reset every January, before taxes, with all distributions reinvested.

As a hypothetical, $100,000 split 50/50, with rounded yields of 11.9% for JEPQ and 0.5% for QQQ, would produce about $6,200 of yearly income, against about $11,900 from JEPQ alone. Yearly fees would be about $175 plus $90, or $265.

A Mix Does Not Diversify the Companies

With 74 shared stocks and notes tied to the same index, JEPQ and QQQ will usually fall together in a technology slump. In October 2026, JEPQ returned −5.10% and the Nasdaq-100 −6.63%. Holding both changes how much upside and income you keep, not which companies drive your results.

Investors who want genuine diversification usually add a fund built on a different index, such as an S&P 500 fund, a dividend fund or bonds. For JEPQ’s sister fund on the S&P 500, see FRC’s guide to JEPI vs JEPQ.

Moving From QQQ to JEPQ Over Time

Some investors use the two funds at different stages of life: QQQ while they are building savings, then a gradual shift toward JEPQ as they start drawing income. Others keep QQQ as the core of their holdings and use a smaller slice of JEPQ to add monthly cash flow.

The switch has a cost that is easy to miss. Selling QQQ in a taxable account realises the gains built up over the years, and those gains are taxed in the year of the sale. As a hypothetical, an investor who sells $100,000 of QQQ bought for $40,000 realises a $60,000 gain; at a 15% long-term capital gains rate, that is about $9,000 of federal tax before a single JEPQ payment arrives. Inside an IRA or a 401(k), the same move carries no immediate tax.

Who Tends to Use Each Fund

The profiles below are hypothetical. They show how investors weigh the trade-offs, not what anyone should do.

Common Mistakes When Comparing QQQ and JEPQ

Frequently Asked Questions

Is JEPQ better than QQQ?

For income, JEPQ has paid far more: around 12% a year against QQQ’s 0.42% SEC yield. For growth, QQQ has done better: the Nasdaq-100 returned 22.03% a year from JEPQ’s launch to 30 September 2026, against 16.89% for JEPQ.

Should I buy QQQ or JEPQ?

That depends on whether you need income now or growth over time, which account will hold the fund and how you are taxed. Investors who need monthly income often look at JEPQ; those building wealth over decades often look at QQQ.

Does JEPQ hold the same stocks as QQQ?

Mostly. On 30 June 2026, 74 of JEPQ’s 94 stocks were also in QQQ, making up 78.2% of JEPQ. JEPQ also holds equity-linked notes tied to the Nasdaq-100.

How has JEPQ performed compared with QQQ?

JEPQ has returned less. From its launch on 3 May 2022 to 30 September 2026, JEPQ returned 16.89% a year at NAV against 22.03% for the Nasdaq-100, which QQQ tracks less its 0.18% fee. JEPQ paid far more of its return as monthly income along the way.

What if I had invested $10,000 in QQQ 10 years ago?

QQQ returned 20.91% a year at NAV over the 10 years to 30 September 2026. As a hypothetical, $10,000 invested at the start of that period with dividends reinvested would have grown to about $66,800, before taxes. JEPQ did not exist for most of that time.

Is JEPQ less risky than QQQ?

It has swung less: its 3-year standard deviation was 11.26 against 17.24 for the Nasdaq-100. But it fell almost as far on price in early 2025, adds bank risk through its notes and recovered more slowly after the fall.

Why does JEPQ return less than QQQ?

Because JEPQ sells call options on the Nasdaq-100, it gives up part of the index’s gains when the market rises strongly. In 2023, when the Nasdaq-100 returned 55.13%, JEPQ returned 36.28%.

Can I hold both QQQ and JEPQ?

Yes, and some investors do, to keep part of the growth and draw part of the income. A mix does not diversify the companies you own, because the two funds hold mostly the same stocks.

Which is better for retirement?

JEPQ supplies monthly income, which suits some retirees drawing on their savings, particularly in an IRA. QQQ suits investors still building savings who can ride out deep falls. Many retirement plans use neither alone.

Which is more tax-efficient?

QQQ, by a wide margin, in a taxable account. Its income is small and was 100% qualified for fiscal 2025, while only 5.10% of JEPQ’s 2025 income was qualified.

What are the fees on QQQ and JEPQ?

QQQ charges 0.18% a year and JEPQ 0.35%. On $10,000, that is $18 against $35.

Is JEPQ a good substitute for QQQ?

Only if you want income more than growth. JEPQ gives you most of the same companies, but with part of the upside sold in exchange for monthly payments taxed mostly as ordinary income.

Choose the Trade, Not the Ticker

QQQ and JEPQ are two ways of owning the same part of the market. QQQ keeps every point of the Nasdaq-100’s growth and every point of its falls; JEPQ trades part of that growth for large monthly income, slightly smaller swings and a heavier tax bill in a taxable account.

Neither is better in general. The right choice depends on what you need the money to do, which account holds it and how you will react when technology stocks fall. FRC’s How to Invest in JEPQ and How to Invest in QQQ courses give you each fund’s full record and a written plan for the one you choose. Invest in your knowledge before you invest your money.

This article is general education, not investment advice. Past performance does not guarantee future results, and distributions vary from month to month and are not guaranteed.