DFSD vs QQQ
Dimensional Short-Duration Fixed Income ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
DFSD has a lower expense ratio. QQQ delivered stronger 1-year returns. DFSD offers more diversification with 1125 holdings.
Side-by-Side Comparison
| Metric | DFSD | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.16% | 0.18% | |
| AUM | $7.1B | $455.8B | |
| Dividend Yield | 4.18% | 0.41% | |
| Holdings | 1,500 | 108 | |
| YTD Return | +0.91% | +17.46% | |
| 1Y Return | +3.03% | +26.02% | |
| 3Y Return (annualized) | +5.26% | +25.51% | |
| 5Y Return (annualized) | - | +15.12% | |
| Volatility (annualized) | 2.7% | 30.6% | |
| Max Drawdown | -8.4% | -83.0% | |
| Fund Family | Dimensional | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Nov 15, 2021 | Mar 10, 1999 |
DFSD vs QQQ Performance
Dimensional Short-Duration Fixed Income ETF (DFSD) is a ETF from Dimensional and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year DFSD returned +3.03% while QQQ returned +26.02%. Year to date, DFSD is up 0.91% versus a gain of 17.46% for QQQ.
Over three years, DFSD compounded at +5.26% per year against +25.51% for QQQ. Across the full 5-year window we track, QQQ has the edge at +13.08% annualized vs +2.50%. 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 2.7% for DFSD. 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 -8.4% for DFSD 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 0.56. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
DFSD charges 0.16% per year while QQQ charges 0.18%. On a $10,000 position that is $16 vs $18 annually, a gap of $2 per year that compounds over a long holding period. On income, DFSD currently yields 4.18% against 0.41% for QQQ.
Holdings Overlap
DFSD and QQQ share 0 holdings out of 1228 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, DFSD or QQQ?
DFSD has an expense ratio of 0.16% while QQQ charges 0.18%. DFSD is the cheaper option. On a $10,000 investment, that is $2 per year of difference.
Which performed better, DFSD or QQQ?
Over the past year DFSD returned +3.03% vs +26.02% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (5 years), DFSD annualized +2.50% vs +13.08% for QQQ. Past performance does not guarantee future results.
Which is riskier, DFSD or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 2.7% for DFSD. Worst drawdown: DFSD -8.4% vs QQQ -83.0%.
Should I hold both DFSD and QQQ?
DFSD and QQQ have a monthly-return correlation of 0.56, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between DFSD and QQQ?
DFSD and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1228 unique securities.
Which pays a higher dividend, DFSD or QQQ?
DFSD yields 4.18% while QQQ yields 0.41%, so DFSD currently pays the higher dividend yield.
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