FDN vs QQQ
First Trust Dow Jones Internet Index Fund 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 | FDN | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.49% | 0.18% | |
| AUM | $5.0B | $455.8B | |
| Dividend Yield | 0.00% | 0.41% | |
| Holdings | 42 | 108 | |
| YTD Return | +11.18% | +19.68% | |
| 1Y Return | +8.65% | +26.75% | |
| 3Y Return (annualized) | +21.22% | +26.25% | |
| 5Y Return (annualized) | +4.11% | +15.39% | |
| Volatility (annualized) | 21.6% | 30.6% | |
| Max Drawdown | -61.5% | -83.0% | |
| Fund Family | First Trust Portfolios (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Jun 19, 2006 | Mar 10, 1999 |
FDN vs QQQ Performance
First Trust Dow Jones Internet Index Fund (FDN) 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 FDN returned +8.65% while QQQ returned +26.75%. Year to date, FDN is up 11.18% versus a gain of 19.68% for QQQ.
Over three years, FDN compounded at +21.22% per year against +26.25% for QQQ; over five years the annualized figures are +4.11% and +15.39% respectively. Across the full 20-year window we track, FDN has the edge at +14.18% annualized vs +13.15%. 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 21.6% for FDN. 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 -61.5% for FDN 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 0.89. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FDN charges 0.49% per year while QQQ charges 0.18%. On a $10,000 position that is $49 vs $18 annually, a gap of $31 per year that compounds over a long holding period. On income, FDN currently yields 0.00% against 0.41% for QQQ.
Holdings Overlap
FDN and QQQ share 14 holdings out of 130 unique holdings combined, representing a 19.4% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FDN or QQQ?
FDN has an expense ratio of 0.49% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $31 per year of difference.
Which performed better, FDN or QQQ?
Over the past year FDN returned +8.65% vs +26.75% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (20 years), FDN annualized +14.18% vs +13.15% for QQQ. Past performance does not guarantee future results.
Which is riskier, FDN or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 21.6% for FDN. Worst drawdown: FDN -61.5% vs QQQ -83.0%.
Should I hold both FDN and QQQ?
FDN and QQQ have a monthly-return correlation of 0.89, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FDN and QQQ?
FDN and QQQ share 14 common holdings with a 19.4% weight overlap. Combined, they hold 130 unique securities.
Which pays a higher dividend, FDN or QQQ?
FDN yields 0.00% while QQQ yields 0.41%, so QQQ currently pays the higher dividend yield.
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