ARB vs QQQ
AltShares Merger Arbitrage ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. QQQ offers more diversification with 108 holdings.
Side-by-Side Comparison
| Metric | ARB | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.76% | 0.18% | |
| AUM | $104M | $496.3B | |
| Dividend Yield | 0.42% | 0.44% | |
| Holdings | 95 | 108 | |
| YTD Return | +2.58% | +16.23% | |
| 1Y Return | +3.48% | +26.23% | |
| 3Y Return (annualized) | +5.39% | +25.75% | |
| 5Y Return (annualized) | +4.16% | +14.78% | |
| Volatility (annualized) | 3.1% | 30.6% | |
| Max Drawdown | -5.6% | -83.0% | |
| Fund Family | AltShares | Invesco (US) | |
| Category | Alternative | Equity | |
| Inception | May 7, 2020 | Mar 10, 1999 |
ARB vs QQQ Performance
AltShares Merger Arbitrage ETF (ARB) is a ETF from AltShares and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year ARB returned +3.48% while QQQ returned +26.23%. Year to date, ARB is up 2.58% versus a gain of 16.23% for QQQ.
Over three years, ARB compounded at +5.39% per year against +25.75% for QQQ; over five years the annualized figures are +4.16% and +14.78% respectively. Across the full 6-year window we track, QQQ has the edge at +13.02% annualized vs +4.11%. 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 3.1% for ARB. 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 -5.6% for ARB 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 0.17. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
ARB charges 0.76% per year while QQQ charges 0.18%. On a $10,000 position that is $76 vs $18 annually, a gap of $58 per year that compounds over a long holding period. On income, ARB currently yields 0.42% against 0.44% for QQQ.
Holdings Overlap
ARB and QQQ share 4 holdings out of 182 unique holdings combined, representing a 0.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, ARB or QQQ?
ARB has an expense ratio of 0.76% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $58 per year of difference.
Which performed better, ARB or QQQ?
Over the past year ARB returned +3.48% vs +26.23% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (6 years), ARB annualized +4.11% vs +13.02% for QQQ. Past performance does not guarantee future results.
Which is riskier, ARB or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 3.1% for ARB. Worst drawdown: ARB -5.6% vs QQQ -83.0%.
Should I hold both ARB and QQQ?
ARB and QQQ have a monthly-return correlation of 0.17, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between ARB and QQQ?
ARB and QQQ share 4 common holdings with a 0.3% weight overlap. Combined, they hold 182 unique securities.
Which pays a higher dividend, ARB or QQQ?
ARB yields 0.42% while QQQ yields 0.44%, so QQQ currently pays the higher dividend yield.
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