CGSM vs QQQ
Capital Group Short Duration Municipal Income ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. CGSM offers more diversification with 2,062 holdings.
Side-by-Side Comparison
| Metric | CGSM | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.25% | 0.18% | |
| AUM | $1.6B | $496.3B | |
| Dividend Yield | 2.92% | 0.44% | |
| Holdings | 2,062 | 108 | |
| YTD Return | +1.46% | +16.64% | |
| 1Y Return | +3.19% | +27.27% | |
| 3Y Return (annualized) | +4.82% | +25.96% | |
| 5Y Return (annualized) | - | +14.54% | |
| Volatility (annualized) | 2.2% | 30.6% | |
| Max Drawdown | -1.4% | -83.0% | |
| Fund Family | Capital Group (US) | Invesco (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Sep 26, 2023 | Mar 10, 1999 |
CGSM vs QQQ Performance
Capital Group Short Duration Municipal Income ETF (CGSM) is a ETF from Capital Group (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year CGSM returned +3.19% while QQQ returned +27.27%. Year to date, CGSM is up 1.46% versus a gain of 16.64% for QQQ.
Over three years, CGSM compounded at +4.82% per year against +25.96% for QQQ. Across the full 3-year window we track, QQQ has the edge at +13.03% annualized vs +4.82%. 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 2.2% for CGSM. 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 -1.4% for CGSM 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 0.49. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
CGSM charges 0.25% per year while QQQ charges 0.18%. On a $10,000 position that is $25 vs $18 annually, a gap of $7 per year that compounds over a long holding period. On income, CGSM currently yields 2.92% against 0.44% for QQQ.
Holdings Overlap
CGSM and QQQ share 0 holdings out of 300 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, CGSM or QQQ?
CGSM has an expense ratio of 0.25% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $7 per year of difference.
Which performed better, CGSM or QQQ?
Over the past year CGSM returned +3.19% vs +27.27% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (3 years), CGSM annualized +4.82% vs +13.03% for QQQ. Past performance does not guarantee future results.
Which is riskier, CGSM or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 2.2% for CGSM. Worst drawdown: CGSM -1.4% vs QQQ -83.0%.
Should I hold both CGSM and QQQ?
CGSM and QQQ have a monthly-return correlation of 0.49, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between CGSM and QQQ?
CGSM and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 300 unique securities.
Which pays a higher dividend, CGSM or QQQ?
CGSM yields 2.92% while QQQ yields 0.44%, so CGSM currently pays the higher dividend yield.
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