FFA vs QQQ
First Trust Enhanced Equity Income 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 | FFA | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 1.13% | 0.18% | |
| AUM | $521M | $496.3B | |
| Dividend Yield | 6.19% | 0.44% | |
| Holdings | 86 | 108 | |
| YTD Return | +11.66% | +19.52% | |
| 1Y Return | +19.75% | +26.68% | |
| 3Y Return (annualized) | +17.89% | +26.64% | |
| 5Y Return (annualized) | +9.76% | +15.36% | |
| Volatility (annualized) | 16.6% | 30.6% | |
| Max Drawdown | -67.6% | -83.0% | |
| Fund Family | First Trust Portfolios (US) | Invesco (US) | |
| Category | Alternative | Equity | |
| Inception | Aug 26, 2004 | Mar 10, 1999 |
FFA vs QQQ Performance
First Trust Enhanced Equity Income Fund (FFA) 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 FFA returned +19.75% while QQQ returned +26.68%. Year to date, FFA is up 11.66% versus a gain of 19.52% for QQQ.
Over three years, FFA compounded at +17.89% per year against +26.64% for QQQ; over five years the annualized figures are +9.76% and +15.36% respectively. Across the full 22-year window we track, QQQ has the edge at +13.14% annualized vs +2.55%. 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 16.6% for FFA. 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 -67.6% for FFA 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 0.80. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FFA charges 1.13% per year while QQQ charges 0.18%. On a $10,000 position that is $113 vs $18 annually, a gap of $95 per year that compounds over a long holding period. On income, FFA currently yields 6.19% against 0.44% for QQQ.
Holdings Overlap
FFA and QQQ share 17 holdings out of 146 unique holdings combined, representing a 38.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FFA or QQQ?
FFA has an expense ratio of 1.13% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $95 per year of difference.
Which performed better, FFA or QQQ?
Over the past year FFA returned +19.75% vs +26.68% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (22 years), FFA annualized +2.55% vs +13.14% for QQQ. Past performance does not guarantee future results.
Which is riskier, FFA or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 16.6% for FFA. Worst drawdown: FFA -67.6% vs QQQ -83.0%.
Should I hold both FFA and QQQ?
FFA and QQQ have a monthly-return correlation of 0.80, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FFA and QQQ?
FFA and QQQ share 17 common holdings with a 38.0% weight overlap. Combined, they hold 146 unique securities.
Which pays a higher dividend, FFA or QQQ?
FFA yields 6.19% while QQQ yields 0.44%, so FFA currently pays the higher dividend yield.
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