FEMB vs QQQ
First Trust Emerging Markets Local Currency Bond 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 | FEMB | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.85% | 0.18% | |
| AUM | $380M | $496.3B | |
| Dividend Yield | 6.19% | 0.44% | |
| Holdings | 68 | 108 | |
| YTD Return | +3.94% | +17.07% | |
| 1Y Return | +8.93% | +26.39% | |
| 3Y Return (annualized) | +8.23% | +26.08% | |
| 5Y Return (annualized) | +3.63% | +15.18% | |
| Volatility (annualized) | 11.4% | 30.6% | |
| Max Drawdown | -47.5% | -83.0% | |
| Fund Family | First Trust Portfolios (US) | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Nov 4, 2014 | Mar 10, 1999 |
FEMB vs QQQ Performance
First Trust Emerging Markets Local Currency Bond ETF (FEMB) 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 FEMB returned +8.93% while QQQ returned +26.39%. Year to date, FEMB is up 3.94% versus a gain of 17.07% for QQQ.
Over three years, FEMB compounded at +8.23% per year against +26.08% for QQQ; over five years the annualized figures are +3.63% and +15.18% respectively. Across the full 12-year window we track, QQQ has the edge at +13.05% annualized vs -1.70%. 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 11.4% for FEMB. 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 -47.5% for FEMB 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 0.47. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FEMB charges 0.85% per year while QQQ charges 0.18%. On a $10,000 position that is $85 vs $18 annually, a gap of $67 per year that compounds over a long holding period. On income, FEMB currently yields 6.19% against 0.44% for QQQ.
Holdings Overlap
FEMB and QQQ share 0 holdings out of 103 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, FEMB or QQQ?
FEMB has an expense ratio of 0.85% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $67 per year of difference.
Which performed better, FEMB or QQQ?
Over the past year FEMB returned +8.93% vs +26.39% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (12 years), FEMB annualized -1.70% vs +13.05% for QQQ. Past performance does not guarantee future results.
Which is riskier, FEMB or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 11.4% for FEMB. Worst drawdown: FEMB -47.5% vs QQQ -83.0%.
Should I hold both FEMB and QQQ?
FEMB and QQQ have a monthly-return correlation of 0.47, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FEMB and QQQ?
FEMB and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 103 unique securities.
Which pays a higher dividend, FEMB or QQQ?
FEMB yields 6.19% while QQQ yields 0.44%, so FEMB currently pays the higher dividend yield.
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