BAB vs QQQ
Invesco Taxable Municipal Bond ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. BAB offers more diversification with 995 holdings.
Side-by-Side Comparison
| Metric | BAB | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.28% | 0.18% | |
| AUM | $1.0B | $455.8B | |
| Dividend Yield | 4.10% | 0.41% | |
| Holdings | 1,480 | 108 | |
| YTD Return | -0.61% | +17.46% | |
| 1Y Return | +2.86% | +26.02% | |
| 3Y Return (annualized) | +4.80% | +25.51% | |
| 5Y Return (annualized) | -1.03% | +15.12% | |
| Volatility (annualized) | 7.3% | 30.6% | |
| Max Drawdown | -27.8% | -83.0% | |
| Fund Family | Invesco (US) | Invesco (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 17, 2009 | Mar 10, 1999 |
BAB vs QQQ Performance
Invesco Taxable Municipal Bond ETF (BAB) is a ETF from Invesco (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year BAB returned +2.86% while QQQ returned +26.02%. Year to date, BAB is down 0.61% versus a gain of 17.46% for QQQ.
Over three years, BAB compounded at +4.80% per year against +25.51% for QQQ; over five years the annualized figures are -1.03% and +15.12% respectively. Across the full 17-year window we track, QQQ has the edge at +13.08% annualized vs +1.51%. 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 7.3% for BAB. 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 -27.8% for BAB 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 0.18. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
BAB charges 0.28% per year while QQQ charges 0.18%. On a $10,000 position that is $28 vs $18 annually, a gap of $10 per year that compounds over a long holding period. On income, BAB currently yields 4.10% against 0.41% for QQQ.
Holdings Overlap
BAB and QQQ share 0 holdings out of 1098 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, BAB or QQQ?
BAB has an expense ratio of 0.28% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $10 per year of difference.
Which performed better, BAB or QQQ?
Over the past year BAB returned +2.86% vs +26.02% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (17 years), BAB annualized +1.51% vs +13.08% for QQQ. Past performance does not guarantee future results.
Which is riskier, BAB or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 7.3% for BAB. Worst drawdown: BAB -27.8% vs QQQ -83.0%.
Should I hold both BAB and QQQ?
BAB and QQQ have a monthly-return correlation of 0.18, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between BAB and QQQ?
BAB and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1098 unique securities.
Which pays a higher dividend, BAB or QQQ?
BAB yields 4.10% while QQQ yields 0.41%, so BAB currently pays the higher dividend yield.
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