AFSM vs QQQ
First Trust Active Factor Small Cap ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. AFSM delivered stronger 1-year returns. AFSM offers more diversification with 335 holdings.
Side-by-Side Comparison
| Metric | AFSM | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.75% | 0.18% | |
| AUM | $123M | $496.3B | |
| Dividend Yield | 0.51% | 0.44% | |
| Holdings | 335 | 108 | |
| YTD Return | +24.26% | +17.07% | |
| 1Y Return | +31.42% | +26.39% | |
| 3Y Return (annualized) | +19.54% | +26.08% | |
| 5Y Return (annualized) | +11.08% | +15.18% | |
| Volatility (annualized) | 22.1% | 30.6% | |
| Max Drawdown | -43.5% | -83.0% | |
| Fund Family | First Trust Portfolios (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Dec 4, 2019 | Mar 10, 1999 |
AFSM vs QQQ Performance
First Trust Active Factor Small Cap ETF (AFSM) is a ETF from First Trust Portfolios (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year AFSM returned +31.42% while QQQ returned +26.39%. Year to date, AFSM is up 24.26% versus a gain of 17.07% for QQQ.
Over three years, AFSM compounded at +19.54% per year against +26.08% for QQQ; over five years the annualized figures are +11.08% and +15.18% respectively. Across the full 7-year window we track, QQQ has the edge at +13.05% annualized vs +11.94%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
QQQ has been the more volatile fund, with annualized monthly volatility of 30.6% compared with 22.1% for AFSM. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -43.5% for AFSM and -83.0% for QQQ. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.70. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
AFSM charges 0.75% per year while QQQ charges 0.18%. On a $10,000 position that is $75 vs $18 annually, a gap of $57 per year that compounds over a long holding period. On income, AFSM currently yields 0.51% against 0.44% for QQQ.
Holdings Overlap
AFSM and QQQ share 0 holdings out of 435 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, AFSM or QQQ?
AFSM has an expense ratio of 0.75% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $57 per year of difference.
Which performed better, AFSM or QQQ?
Over the past year AFSM returned +31.42% vs +26.39% for QQQ, so AFSM leads on 1-year performance. Over the longest common window we track (7 years), AFSM annualized +11.94% vs +13.05% for QQQ. Past performance does not guarantee future results.
Which is riskier, AFSM or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 22.1% for AFSM. Worst drawdown: AFSM -43.5% vs QQQ -83.0%.
Should I hold both AFSM and QQQ?
AFSM and QQQ have a monthly-return correlation of 0.70, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between AFSM and QQQ?
AFSM and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 435 unique securities.
Which pays a higher dividend, AFSM or QQQ?
AFSM yields 0.51% while QQQ yields 0.44%, so AFSM currently pays the higher dividend yield.
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