ESML vs QQQ
iShares ESG Aware MSCI USA Small-Cap ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
ESML has a lower expense ratio. ESML delivered stronger 1-year returns. ESML offers more diversification with 861 holdings.
Side-by-Side Comparison
| Metric | ESML | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.17% | 0.18% | |
| AUM | $2.8B | $455.8B | |
| Dividend Yield | 0.89% | 0.41% | |
| Holdings | 913 | 108 | |
| YTD Return | +20.32% | +18.31% | |
| 1Y Return | +31.16% | +25.37% | |
| 3Y Return (annualized) | +17.07% | +25.79% | |
| 5Y Return (annualized) | +8.26% | +15.20% | |
| Volatility (annualized) | 21.4% | 30.6% | |
| Max Drawdown | -42.0% | -83.0% | |
| Fund Family | iShares by BlackRock (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Apr 10, 2018 | Mar 10, 1999 |
ESML vs QQQ Performance
iShares ESG Aware MSCI USA Small-Cap ETF (ESML) 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 ESML returned +31.16% while QQQ returned +25.37%. Year to date, ESML is up 20.32% versus a gain of 18.31% for QQQ.
Over three years, ESML compounded at +17.07% per year against +25.79% for QQQ; over five years the annualized figures are +8.26% and +15.20% respectively. Across the full 8-year window we track, QQQ has the edge at +13.10% annualized vs +10.63%. 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 21.4% for ESML. 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 -42.0% for ESML 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 0.77. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
ESML charges 0.17% per year while QQQ charges 0.18%. On a $10,000 position that is $17 vs $18 annually, a gap of $1 per year that compounds over a long holding period. On income, ESML currently yields 0.89% against 0.41% for QQQ.
Holdings Overlap
ESML and QQQ share 1 holdings out of 963 unique holdings combined, representing a 1.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in ESML | Weight in QQQ | Difference |
|---|---|---|---|
| SNDK | 3.66% | 1.10% | 2.56% |
Frequently Asked Questions
Which is cheaper, ESML or QQQ?
ESML has an expense ratio of 0.17% while QQQ charges 0.18%. ESML is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, ESML or QQQ?
Over the past year ESML returned +31.16% vs +25.37% for QQQ, so ESML leads on 1-year performance. Over the longest common window we track (8 years), ESML annualized +10.63% vs +13.10% for QQQ. Past performance does not guarantee future results.
Which is riskier, ESML or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 21.4% for ESML. Worst drawdown: ESML -42.0% vs QQQ -83.0%.
Should I hold both ESML and QQQ?
ESML and QQQ have a monthly-return correlation of 0.77, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between ESML and QQQ?
ESML and QQQ share 1 common holdings with a 1.1% weight overlap. Combined, they hold 963 unique securities.
Which pays a higher dividend, ESML or QQQ?
ESML yields 0.89% while QQQ yields 0.41%, so ESML currently pays the higher dividend yield.
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