FAD vs QQQ
First Trust Multi Cap Growth AlphaDEX Fund vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. FAD offers more diversification with 677 holdings.
Side-by-Side Comparison
| Metric | FAD | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.63% | 0.18% | |
| AUM | $608M | $496.3B | |
| Dividend Yield | 0.10% | 0.44% | |
| Holdings | 677 | 108 | |
| YTD Return | +14.23% | +16.23% | |
| 1Y Return | +24.27% | +26.23% | |
| 3Y Return (annualized) | +22.65% | +25.75% | |
| 5Y Return (annualized) | +9.91% | +14.78% | |
| Volatility (annualized) | 18.6% | 30.6% | |
| Max Drawdown | -54.5% | -83.0% | |
| Fund Family | First Trust Portfolios (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | May 8, 2007 | Mar 10, 1999 |
FAD vs QQQ Performance
First Trust Multi Cap Growth AlphaDEX Fund (FAD) is a ETF from First Trust Portfolios (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year FAD returned +24.27% while QQQ returned +26.23%. Year to date, FAD is up 14.23% versus a gain of 16.23% for QQQ.
Over three years, FAD compounded at +22.65% per year against +25.75% for QQQ; over five years the annualized figures are +9.91% and +14.78% respectively. Across the full 19-year window we track, QQQ has the edge at +13.02% annualized vs +10.10%. 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 18.6% for FAD. 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 -54.5% for FAD 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 0.86. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FAD charges 0.63% per year while QQQ charges 0.18%. On a $10,000 position that is $63 vs $18 annually, a gap of $45 per year that compounds over a long holding period. On income, FAD currently yields 0.10% against 0.44% for QQQ.
Holdings Overlap
FAD and QQQ share 45 holdings out of 720 unique holdings combined, representing a 12.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FAD or QQQ?
FAD has an expense ratio of 0.63% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $45 per year of difference.
Which performed better, FAD or QQQ?
Over the past year FAD returned +24.27% vs +26.23% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (19 years), FAD annualized +10.10% vs +13.02% for QQQ. Past performance does not guarantee future results.
Which is riskier, FAD or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 18.6% for FAD. Worst drawdown: FAD -54.5% vs QQQ -83.0%.
Should I hold both FAD and QQQ?
FAD and QQQ have a monthly-return correlation of 0.86, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FAD and QQQ?
FAD and QQQ share 45 common holdings with a 12.0% weight overlap. Combined, they hold 720 unique securities.
Which pays a higher dividend, FAD or QQQ?
FAD yields 0.10% while QQQ yields 0.44%, so QQQ currently pays the higher dividend yield.
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