FEMS vs QQQ
First Trust Emerging Markets Small Cap AlphaDEX Fund vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. FEMS offers more diversification with 218 holdings.
Side-by-Side Comparison
| Metric | FEMS | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.80% | 0.18% | |
| AUM | $254M | $496.3B | |
| Dividend Yield | 4.43% | 0.44% | |
| Holdings | 218 | 108 | |
| YTD Return | +9.95% | +16.23% | |
| 1Y Return | +11.71% | +26.23% | |
| 3Y Return (annualized) | +11.03% | +25.75% | |
| 5Y Return (annualized) | +6.35% | +14.78% | |
| Volatility (annualized) | 19.2% | 30.6% | |
| Max Drawdown | -52.3% | -83.0% | |
| Fund Family | First Trust Portfolios (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Feb 15, 2012 | Mar 10, 1999 |
FEMS vs QQQ Performance
First Trust Emerging Markets Small Cap AlphaDEX Fund (FEMS) 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 FEMS returned +11.71% while QQQ returned +26.23%. Year to date, FEMS is up 9.95% versus a gain of 16.23% for QQQ.
Over three years, FEMS compounded at +11.03% per year against +25.75% for QQQ; over five years the annualized figures are +6.35% and +14.78% respectively. Across the full 15-year window we track, QQQ has the edge at +13.02% annualized vs +4.66%. 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 19.2% for FEMS. 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 -52.3% for FEMS 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 0.52. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FEMS charges 0.80% per year while QQQ charges 0.18%. On a $10,000 position that is $80 vs $18 annually, a gap of $62 per year that compounds over a long holding period. On income, FEMS currently yields 4.43% against 0.44% for QQQ.
Holdings Overlap
FEMS and QQQ share 0 holdings out of 305 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, FEMS or QQQ?
FEMS has an expense ratio of 0.80% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $62 per year of difference.
Which performed better, FEMS or QQQ?
Over the past year FEMS returned +11.71% vs +26.23% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (15 years), FEMS annualized +4.66% vs +13.02% for QQQ. Past performance does not guarantee future results.
Which is riskier, FEMS or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 19.2% for FEMS. Worst drawdown: FEMS -52.3% vs QQQ -83.0%.
Should I hold both FEMS and QQQ?
FEMS and QQQ have a monthly-return correlation of 0.52, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FEMS and QQQ?
FEMS and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 305 unique securities.
Which pays a higher dividend, FEMS or QQQ?
FEMS yields 4.43% while QQQ yields 0.44%, so FEMS currently pays the higher dividend yield.
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