Two of Wall Street's biggest ETF issuers, BlackRock Inc. (NYSE:BLK) and State Street Corp. (NYSE:STT), have filed regulatory documents with the SEC to launch Nasdaq 100 ETFs, threatening Invesco Ltd.'s (NYSE:IVZ) decade-long dominance in one of the lucrative corners of the market.   

BlackRock, on Monday, filed for the iShares Nasdaq-100 ETF with a ticker "IQQ" and State Street filed for SPDR Nasdaq 100 ETF on Tuesday. Both the proposed funds will track the Nasdaq 100 Index, which measures the performance of 100 of the largest nonfinancial companies based on market capitalization that are listed on the Nasdaq Stock Market.

Invesco's QQQ Dominance in Jeopardy

Invesco has long dominated the space with the Invesco QQQ Trust Series 1 (NASDAQ:QQQ), launched in March 1999. It is one of the most successful ETFs, with $375.5 billion in assets under management, and has delivered a cumulative return of more than 468% over the past decade. Invesco NASDAQ 100 ETF (NASDAQ:QQQM) also tracks the Nasdaq 100 Index, like QQQ. It has gathered $70 billion in AUM since its inception in October 2020 and delivered a return of nearly 14%.

The new filings, if approved, could challenge this dominance, as both funds from BlackRock and State Street would track the same index.

Expense Ratios Could Be Key

While the expense ratios of both funds have not yet been disclosed in SEC filings, fees remain a key competitive factor in the ETF industry. ETFs with lower expense ratios tend to outperform higher-cost peers over time, all else equal. Invesco's QQQ currently charges an expense ratio of 0.18% while QQQM has lower annual fees of 0.15%. Even a slight fee advantage could help BlackRock or State Street attract significant investor inflows.

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