FEDM vs QQQ
FlexShares ESG & Climate Developed Markets ex-US Core Index Fund vs Invesco QQQ Trust, Series 1
Quick Verdict
FEDM has a lower expense ratio. QQQ delivered stronger 1-year returns. FEDM offers more diversification with 265 holdings.
Side-by-Side Comparison
| Metric | FEDM | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.12% | 0.18% | |
| AUM | $83M | $496.3B | |
| Dividend Yield | 2.87% | 0.44% | |
| Holdings | 265 | 108 | |
| YTD Return | +12.38% | +16.23% | |
| 1Y Return | +20.25% | +26.23% | |
| 3Y Return (annualized) | +17.44% | +25.75% | |
| 5Y Return (annualized) | +8.65% | +14.78% | |
| Volatility (annualized) | 15.7% | 30.6% | |
| Max Drawdown | -29.4% | -83.0% | |
| Fund Family | Flexshares Trust | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Sep 20, 2021 | Mar 10, 1999 |
FEDM vs QQQ Performance
FlexShares ESG & Climate Developed Markets ex-US Core Index Fund (FEDM) is a ETF from Flexshares Trust and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year FEDM returned +20.25% while QQQ returned +26.23%. Year to date, FEDM is up 12.38% versus a gain of 16.23% for QQQ.
Over three years, FEDM compounded at +17.44% per year against +25.75% for QQQ; over five years the annualized figures are +8.65% and +14.78% respectively. Across the full 5-year window we track, QQQ has the edge at +13.02% annualized vs +8.65%. 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 15.7% for FEDM. 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 -29.4% for FEDM 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 0.63. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FEDM charges 0.12% per year while QQQ charges 0.18%. On a $10,000 position that is $12 vs $18 annually, a gap of $6 per year that compounds over a long holding period. On income, FEDM currently yields 2.87% against 0.44% for QQQ.
Holdings Overlap
FEDM and QQQ share 1 holdings out of 319 unique holdings combined, representing a 0.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in FEDM | Weight in QQQ | Difference |
|---|---|---|---|
| ROP | 0.21% | 0.17% | 0.04% |
Frequently Asked Questions
Which is cheaper, FEDM or QQQ?
FEDM has an expense ratio of 0.12% while QQQ charges 0.18%. FEDM is the cheaper option. On a $10,000 investment, that is $6 per year of difference.
Which performed better, FEDM or QQQ?
Over the past year FEDM returned +20.25% vs +26.23% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (5 years), FEDM annualized +8.65% vs +13.02% for QQQ. Past performance does not guarantee future results.
Which is riskier, FEDM or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 15.7% for FEDM. Worst drawdown: FEDM -29.4% vs QQQ -83.0%.
Should I hold both FEDM and QQQ?
FEDM and QQQ have a monthly-return correlation of 0.63, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FEDM and QQQ?
FEDM and QQQ share 1 common holdings with a 0.2% weight overlap. Combined, they hold 319 unique securities.
Which pays a higher dividend, FEDM or QQQ?
FEDM yields 2.87% while QQQ yields 0.44%, so FEDM currently pays the higher dividend yield.
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