FALN vs QQQ
iShares Fallen Angels USD Bond ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. FALN offers more diversification with 159 holdings.
Side-by-Side Comparison
| Metric | FALN | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.25% | 0.18% | |
| AUM | $1.6B | $496.3B | |
| Dividend Yield | 6.51% | 0.44% | |
| Holdings | 159 | 108 | |
| YTD Return | +2.62% | +16.64% | |
| 1Y Return | +6.43% | +27.27% | |
| 3Y Return (annualized) | +9.20% | +25.96% | |
| 5Y Return (annualized) | +3.57% | +14.54% | |
| Volatility (annualized) | 9.4% | 30.6% | |
| Max Drawdown | -30.0% | -83.0% | |
| Fund Family | iShares by BlackRock (US) | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jun 14, 2016 | Mar 10, 1999 |
FALN vs QQQ Performance
iShares Fallen Angels USD Bond ETF (FALN) 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 FALN returned +6.43% while QQQ returned +27.27%. Year to date, FALN is up 2.62% versus a gain of 16.64% for QQQ.
Over three years, FALN compounded at +9.20% per year against +25.96% for QQQ; over five years the annualized figures are +3.57% and +14.54% respectively. Across the full 10-year window we track, QQQ has the edge at +13.03% annualized vs +3.72%. 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 9.4% for FALN. 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 -30.0% for FALN 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
FALN charges 0.25% per year while QQQ charges 0.18%. On a $10,000 position that is $25 vs $18 annually, a gap of $7 per year that compounds over a long holding period. On income, FALN currently yields 6.51% against 0.44% for QQQ.
Holdings Overlap
FALN and QQQ share 0 holdings out of 253 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, FALN or QQQ?
FALN has an expense ratio of 0.25% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $7 per year of difference.
Which performed better, FALN or QQQ?
Over the past year FALN returned +6.43% vs +27.27% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (10 years), FALN annualized +3.72% vs +13.03% for QQQ. Past performance does not guarantee future results.
Which is riskier, FALN or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 9.4% for FALN. Worst drawdown: FALN -30.0% vs QQQ -83.0%.
Should I hold both FALN and QQQ?
FALN 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 FALN and QQQ?
FALN and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 253 unique securities.
Which pays a higher dividend, FALN or QQQ?
FALN yields 6.51% while QQQ yields 0.44%, so FALN currently pays the higher dividend yield.
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