EEM vs QQQ
iShares MSCI Emerging Markets ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. EEM delivered stronger 1-year returns. EEM offers more diversification with 1109 holdings.
Side-by-Side Comparison
| Metric | EEM | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.72% | 0.18% | |
| AUM | $28.6B | $455.8B | |
| Dividend Yield | 1.63% | 0.41% | |
| Holdings | 1,224 | 108 | |
| YTD Return | +16.94% | +17.46% | |
| 1Y Return | +35.32% | +26.02% | |
| 3Y Return (annualized) | +21.36% | +25.51% | |
| 5Y Return (annualized) | +7.06% | +15.12% | |
| Volatility (annualized) | 20.8% | 30.6% | |
| Max Drawdown | -68.8% | -83.0% | |
| Fund Family | iShares by BlackRock (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Apr 7, 2003 | Mar 10, 1999 |
EEM vs QQQ Performance
iShares MSCI Emerging Markets ETF (EEM) is a ETF from iShares by BlackRock (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year EEM returned +35.32% while QQQ returned +26.02%. Year to date, EEM is up 16.94% versus a gain of 17.46% for QQQ.
Over three years, EEM compounded at +21.36% per year against +25.51% for QQQ; over five years the annualized figures are +7.06% and +15.12% respectively. Across the full 23-year window we track, QQQ has the edge at +13.08% annualized vs +8.47%. 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 20.8% for EEM. 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 -68.8% for EEM 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 0.69. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
EEM charges 0.72% per year while QQQ charges 0.18%. On a $10,000 position that is $72 vs $18 annually, a gap of $54 per year that compounds over a long holding period. On income, EEM currently yields 1.63% against 0.41% for QQQ.
Holdings Overlap
EEM and QQQ share 1 holdings out of 1211 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 EEM | Weight in QQQ | Difference |
|---|---|---|---|
| PDD | 0.38% | 0.25% | 0.13% |
Frequently Asked Questions
Which is cheaper, EEM or QQQ?
EEM has an expense ratio of 0.72% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $54 per year of difference.
Which performed better, EEM or QQQ?
Over the past year EEM returned +35.32% vs +26.02% for QQQ, so EEM leads on 1-year performance. Over the longest common window we track (23 years), EEM annualized +8.47% vs +13.08% for QQQ. Past performance does not guarantee future results.
Which is riskier, EEM or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 20.8% for EEM. Worst drawdown: EEM -68.8% vs QQQ -83.0%.
Should I hold both EEM and QQQ?
EEM and QQQ have a monthly-return correlation of 0.69, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between EEM and QQQ?
EEM and QQQ share 1 common holdings with a 0.3% weight overlap. Combined, they hold 1211 unique securities.
Which pays a higher dividend, EEM or QQQ?
EEM yields 1.63% while QQQ yields 0.41%, so EEM currently pays the higher dividend yield.
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