DFEM vs QQQ
Dimensional Emerging Markets Core Equity 2 ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. DFEM delivered stronger 1-year returns. DFEM offers more diversification with 6316 holdings.
Side-by-Side Comparison
| Metric | DFEM | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.39% | 0.18% | |
| AUM | $8.9B | $455.8B | |
| Dividend Yield | 1.85% | 0.41% | |
| Holdings | 6,512 | 108 | |
| YTD Return | +18.51% | +18.31% | |
| 1Y Return | +32.08% | +25.37% | |
| 3Y Return (annualized) | +21.46% | +25.79% | |
| 5Y Return (annualized) | - | +15.20% | |
| Volatility (annualized) | 17.5% | 30.6% | |
| Max Drawdown | -20.8% | -83.0% | |
| Fund Family | Dimensional | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Apr 26, 2022 | Mar 10, 1999 |
DFEM vs QQQ Performance
Dimensional Emerging Markets Core Equity 2 ETF (DFEM) is a ETF from Dimensional and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year DFEM returned +32.08% while QQQ returned +25.37%. Year to date, DFEM is up 18.51% versus a gain of 18.31% for QQQ.
Over three years, DFEM compounded at +21.46% per year against +25.79% for QQQ. Across the full 4-year window we track, DFEM has the edge at +14.01% annualized vs +13.10%. 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 17.5% for DFEM. 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 -20.8% for DFEM 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 0.68. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
DFEM charges 0.39% per year while QQQ charges 0.18%. On a $10,000 position that is $39 vs $18 annually, a gap of $21 per year that compounds over a long holding period. On income, DFEM currently yields 1.85% against 0.41% for QQQ.
Holdings Overlap
DFEM and QQQ share 1 holdings out of 6418 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 DFEM | Weight in QQQ | Difference |
|---|---|---|---|
| PDD | 0.51% | 0.25% | 0.26% |
Frequently Asked Questions
Which is cheaper, DFEM or QQQ?
DFEM has an expense ratio of 0.39% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $21 per year of difference.
Which performed better, DFEM or QQQ?
Over the past year DFEM returned +32.08% vs +25.37% for QQQ, so DFEM leads on 1-year performance. Over the longest common window we track (4 years), DFEM annualized +14.01% vs +13.10% for QQQ. Past performance does not guarantee future results.
Which is riskier, DFEM or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 17.5% for DFEM. Worst drawdown: DFEM -20.8% vs QQQ -83.0%.
Should I hold both DFEM and QQQ?
DFEM and QQQ have a monthly-return correlation of 0.68, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between DFEM and QQQ?
DFEM and QQQ share 1 common holdings with a 0.3% weight overlap. Combined, they hold 6418 unique securities.
Which pays a higher dividend, DFEM or QQQ?
DFEM yields 1.85% while QQQ yields 0.41%, so DFEM currently pays the higher dividend yield.
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