FAZ vs QQQ
Direxion Daily Financial Bear 3X ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. QQQ offers more diversification with 108 holdings.
Side-by-Side Comparison
| Metric | FAZ | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 1.03% | 0.18% | |
| AUM | $84M | $496.3B | |
| Dividend Yield | 2.54% | 0.44% | |
| Holdings | 8 | 108 | |
| YTD Return | -16.30% | +17.30% | |
| 1Y Return | -26.41% | +24.93% | |
| 3Y Return (annualized) | -42.92% | +26.19% | |
| 5Y Return (annualized) | -31.54% | +15.34% | |
| Volatility (annualized) | 53.4% | 30.6% | |
| Max Drawdown | -100.0% | -83.0% | |
| Fund Family | Direxion Shares ETF Trust | Invesco (US) | |
| Category | Alternative | Equity | |
| Inception | Nov 6, 2008 | Mar 10, 1999 |
FAZ vs QQQ Performance
Direxion Daily Financial Bear 3X ETF (FAZ) is a ETF from Direxion Shares ETF Trust and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year FAZ returned -26.41% while QQQ returned +24.93%. Year to date, FAZ is down 16.30% versus a gain of 17.30% for QQQ.
Over three years, FAZ compounded at -42.92% per year against +26.19% for QQQ; over five years the annualized figures are -31.54% and +15.34% respectively. Across the full 18-year window we track, QQQ has the edge at +13.06% annualized vs -52.79%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FAZ has been the more volatile fund, with annualized monthly volatility of 53.4% compared with 30.6% for QQQ. 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 -100.0% for FAZ 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 -0.66. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FAZ charges 1.03% per year while QQQ charges 0.18%. On a $10,000 position that is $103 vs $18 annually, a gap of $85 per year that compounds over a long holding period. On income, FAZ currently yields 2.54% against 0.44% for QQQ.
Holdings Overlap
FAZ and QQQ share 0 holdings out of 105 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, FAZ or QQQ?
FAZ has an expense ratio of 1.03% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $85 per year of difference.
Which performed better, FAZ or QQQ?
Over the past year FAZ returned -26.41% vs +24.93% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (18 years), FAZ annualized -52.79% vs +13.06% for QQQ. Past performance does not guarantee future results.
Which is riskier, FAZ or QQQ?
FAZ has been the more volatile fund at 53.4% annualized versus 30.6% for QQQ. Worst drawdown: FAZ -100.0% vs QQQ -83.0%.
Should I hold both FAZ and QQQ?
FAZ and QQQ have a monthly-return correlation of -0.66, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FAZ and QQQ?
FAZ and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 105 unique securities.
Which pays a higher dividend, FAZ or QQQ?
FAZ yields 2.54% while QQQ yields 0.44%, so FAZ currently pays the higher dividend yield.
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