BABO vs QQQ
YieldMax BABA Option Income Strategy 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 103 holdings.
Side-by-Side Comparison
| Metric | BABO | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 1.00% | 0.18% | |
| AUM | $17M | $455.8B | |
| Dividend Yield | 110.77% | 0.41% | |
| Holdings | 11 | 108 | |
| YTD Return | -22.77% | +19.68% | |
| 1Y Return | -8.22% | +26.75% | |
| 3Y Return (annualized) | - | +26.25% | |
| 5Y Return (annualized) | - | +15.39% | |
| Volatility (annualized) | 41.6% | 30.6% | |
| Max Drawdown | -42.6% | -83.0% | |
| Fund Family | YieldMax ETF | Invesco (US) | |
| Category | Alternative | Equity | |
| Inception | Aug 7, 2024 | Mar 10, 1999 |
BABO vs QQQ Performance
YieldMax BABA Option Income Strategy ETF (BABO) is a ETF from YieldMax ETF and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year BABO returned -8.22% while QQQ returned +26.75%. Year to date, BABO is down 22.77% versus a gain of 19.68% for QQQ.
Risk: Volatility and Drawdowns
BABO has been the more volatile fund, with annualized monthly volatility of 41.6% compared with 30.6% for QQQ. 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 -42.6% for BABO 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 -0.04. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
BABO charges 1.00% per year while QQQ charges 0.18%. On a $10,000 position that is $100 vs $18 annually, a gap of $82 per year that compounds over a long holding period. On income, BABO currently yields 110.77% against 0.41% for QQQ.
Holdings Overlap
BABO and QQQ share 0 holdings out of 106 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, BABO or QQQ?
BABO has an expense ratio of 1.00% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $82 per year of difference.
Which performed better, BABO or QQQ?
Over the past year BABO returned -8.22% vs +26.75% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (2 years), BABO annualized +9.04% vs +13.15% for QQQ. Past performance does not guarantee future results.
Which is riskier, BABO or QQQ?
BABO has been the more volatile fund at 41.6% annualized versus 30.6% for QQQ. Worst drawdown: BABO -42.6% vs QQQ -83.0%.
Should I hold both BABO and QQQ?
BABO and QQQ have a monthly-return correlation of -0.04, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between BABO and QQQ?
BABO and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 106 unique securities.
Which pays a higher dividend, BABO or QQQ?
BABO yields 110.77% while QQQ yields 0.41%, so BABO currently pays the higher dividend yield.
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