DFAE vs QQQ
Dimensional Emerging Core Equity Market ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. DFAE delivered stronger 1-year returns. DFAE offers more diversification with 6,482 holdings.
Side-by-Side Comparison
| Metric | DFAE | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.35% | 0.18% | |
| AUM | $9.8B | $496.3B | |
| Dividend Yield | 1.84% | 0.44% | |
| Holdings | 6,482 | 108 | |
| YTD Return | +16.52% | +17.30% | |
| 1Y Return | +30.52% | +24.93% | |
| 3Y Return (annualized) | +21.69% | +26.19% | |
| 5Y Return (annualized) | +9.72% | +15.34% | |
| Volatility (annualized) | 16.1% | 30.6% | |
| Max Drawdown | -32.2% | -83.0% | |
| Fund Family | Dimensional | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Dec 1, 2020 | Mar 10, 1999 |
DFAE vs QQQ Performance
Dimensional Emerging Core Equity Market ETF (DFAE) is a ETF from Dimensional and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year DFAE returned +30.52% while QQQ returned +24.93%. Year to date, DFAE is up 16.52% versus a gain of 17.30% for QQQ.
Over three years, DFAE compounded at +21.69% per year against +26.19% for QQQ; over five years the annualized figures are +9.72% and +15.34% respectively. Across the full 6-year window we track, QQQ has the edge at +13.06% annualized vs +9.80%. 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 16.1% for DFAE. 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 -32.2% for DFAE 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 0.64. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
DFAE charges 0.35% per year while QQQ charges 0.18%. On a $10,000 position that is $35 vs $18 annually, a gap of $17 per year that compounds over a long holding period. On income, DFAE currently yields 1.84% against 0.44% for QQQ.
Holdings Overlap
DFAE and QQQ share 1 holdings out of 6427 unique holdings combined, representing a 0.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in DFAE | Weight in QQQ | Difference |
|---|---|---|---|
| PDD:IE | 0.58% | 0.27% | 0.31% |
Frequently Asked Questions
Which is cheaper, DFAE or QQQ?
DFAE has an expense ratio of 0.35% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $17 per year of difference.
Which performed better, DFAE or QQQ?
Over the past year DFAE returned +30.52% vs +24.93% for QQQ, so DFAE leads on 1-year performance. Over the longest common window we track (6 years), DFAE annualized +9.80% vs +13.06% for QQQ. Past performance does not guarantee future results.
Which is riskier, DFAE or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 16.1% for DFAE. Worst drawdown: DFAE -32.2% vs QQQ -83.0%.
Should I hold both DFAE and QQQ?
DFAE and QQQ have a monthly-return correlation of 0.64, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between DFAE and QQQ?
DFAE and QQQ share 1 common holdings with a 0.3% weight overlap. Combined, they hold 6427 unique securities.
Which pays a higher dividend, DFAE or QQQ?
DFAE yields 1.84% while QQQ yields 0.44%, so DFAE currently pays the higher dividend yield.
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