FCEF vs QQQ
First Trust Income Opportunities 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 | FCEF | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 3.69% | 0.18% | |
| AUM | $83M | $496.3B | |
| Dividend Yield | 6.88% | 0.44% | |
| Holdings | 62 | 108 | |
| YTD Return | +10.09% | +17.30% | |
| 1Y Return | +14.73% | +24.93% | |
| 3Y Return (annualized) | +16.17% | +26.19% | |
| 5Y Return (annualized) | +6.20% | +15.34% | |
| Volatility (annualized) | 14.6% | 30.6% | |
| Max Drawdown | -45.1% | -83.0% | |
| Fund Family | First Trust Portfolios (US) | Invesco (US) | |
| Category | Allocation/Balanced | Equity | |
| Inception | Sep 27, 2016 | Mar 10, 1999 |
FCEF vs QQQ Performance
First Trust Income Opportunities ETF (FCEF) 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 FCEF returned +14.73% while QQQ returned +24.93%. Year to date, FCEF is up 10.09% versus a gain of 17.30% for QQQ.
Over three years, FCEF compounded at +16.17% per year against +26.19% for QQQ; over five years the annualized figures are +6.20% and +15.34% respectively. Across the full 10-year window we track, QQQ has the edge at +13.06% annualized vs +5.85%. 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 14.6% for FCEF. 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 -45.1% for FCEF 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 0.76. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FCEF charges 3.69% per year while QQQ charges 0.18%. On a $10,000 position that is $369 vs $18 annually, a gap of $351 per year that compounds over a long holding period. On income, FCEF currently yields 6.88% against 0.44% for QQQ.
Holdings Overlap
FCEF and QQQ share 0 holdings out of 162 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, FCEF or QQQ?
FCEF has an expense ratio of 3.69% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $351 per year of difference.
Which performed better, FCEF or QQQ?
Over the past year FCEF returned +14.73% vs +24.93% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (10 years), FCEF annualized +5.85% vs +13.06% for QQQ. Past performance does not guarantee future results.
Which is riskier, FCEF or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 14.6% for FCEF. Worst drawdown: FCEF -45.1% vs QQQ -83.0%.
Should I hold both FCEF and QQQ?
FCEF and QQQ have a monthly-return correlation of 0.76, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FCEF and QQQ?
FCEF and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 162 unique securities.
Which pays a higher dividend, FCEF or QQQ?
FCEF yields 6.88% while QQQ yields 0.44%, so FCEF currently pays the higher dividend yield.
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