FLMI vs QQQ
Franklin Dynamic Municipal Bond ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. FLMI offers more diversification with 1,342 holdings.
Side-by-Side Comparison
| Metric | FLMI | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.30% | 0.18% | |
| AUM | $2.4B | $496.3B | |
| Dividend Yield | 3.96% | 0.44% | |
| Holdings | 1,342 | 108 | |
| YTD Return | +1.49% | +17.07% | |
| 1Y Return | +6.34% | +26.39% | |
| 3Y Return (annualized) | +5.82% | +26.08% | |
| 5Y Return (annualized) | +1.77% | +15.18% | |
| Volatility (annualized) | 5.5% | 30.6% | |
| Max Drawdown | -14.7% | -83.0% | |
| Fund Family | Franklin Templeton Investments (US) | Invesco (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Aug 31, 2017 | Mar 10, 1999 |
FLMI vs QQQ Performance
Franklin Dynamic Municipal Bond ETF (FLMI) is a ETF from Franklin Templeton Investments (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year FLMI returned +6.34% while QQQ returned +26.39%. Year to date, FLMI is up 1.49% versus a gain of 17.07% for QQQ.
Over three years, FLMI compounded at +5.82% per year against +26.08% for QQQ; over five years the annualized figures are +1.77% and +15.18% respectively. Across the full 9-year window we track, QQQ has the edge at +13.05% annualized vs +2.01%. 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 5.5% for FLMI. 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 -14.7% for FLMI 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 0.50. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FLMI charges 0.30% per year while QQQ charges 0.18%. On a $10,000 position that is $30 vs $18 annually, a gap of $12 per year that compounds over a long holding period. On income, FLMI currently yields 3.96% against 0.44% for QQQ.
Holdings Overlap
FLMI and QQQ share 0 holdings out of 304 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, FLMI or QQQ?
FLMI has an expense ratio of 0.30% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $12 per year of difference.
Which performed better, FLMI or QQQ?
Over the past year FLMI returned +6.34% vs +26.39% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (9 years), FLMI annualized +2.01% vs +13.05% for QQQ. Past performance does not guarantee future results.
Which is riskier, FLMI or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 5.5% for FLMI. Worst drawdown: FLMI -14.7% vs QQQ -83.0%.
Should I hold both FLMI and QQQ?
FLMI and QQQ have a monthly-return correlation of 0.50, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FLMI and QQQ?
FLMI and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 304 unique securities.
Which pays a higher dividend, FLMI or QQQ?
FLMI yields 3.96% while QQQ yields 0.44%, so FLMI currently pays the higher dividend yield.
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