FMHI vs QQQ
First Trust Municipal High Income ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. FMHI offers more diversification with 736 holdings.
Side-by-Side Comparison
| Metric | FMHI | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.49% | 0.18% | |
| AUM | $1.0B | $496.3B | |
| Dividend Yield | 4.35% | 0.44% | |
| Holdings | 736 | 108 | |
| YTD Return | +1.31% | +16.64% | |
| 1Y Return | +6.78% | +27.27% | |
| 3Y Return (annualized) | +4.87% | +25.96% | |
| 5Y Return (annualized) | +0.23% | +14.54% | |
| Volatility (annualized) | 7.2% | 30.6% | |
| Max Drawdown | -18.8% | -83.0% | |
| Fund Family | First Trust Portfolios (US) | Invesco (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 2, 2017 | Mar 10, 1999 |
FMHI vs QQQ Performance
First Trust Municipal High Income ETF (FMHI) 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 FMHI returned +6.78% while QQQ returned +27.27%. Year to date, FMHI is up 1.31% versus a gain of 16.64% for QQQ.
Over three years, FMHI compounded at +4.87% per year against +25.96% for QQQ; over five years the annualized figures are +0.23% and +14.54% respectively. Across the full 9-year window we track, QQQ has the edge at +13.03% annualized vs +1.71%. 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 7.2% for FMHI. 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 -18.8% for FMHI 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 0.49. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FMHI charges 0.49% per year while QQQ charges 0.18%. On a $10,000 position that is $49 vs $18 annually, a gap of $31 per year that compounds over a long holding period. On income, FMHI currently yields 4.35% against 0.44% for QQQ.
Holdings Overlap
FMHI and QQQ share 0 holdings out of 590 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, FMHI or QQQ?
FMHI has an expense ratio of 0.49% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $31 per year of difference.
Which performed better, FMHI or QQQ?
Over the past year FMHI returned +6.78% vs +27.27% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (9 years), FMHI annualized +1.71% vs +13.03% for QQQ. Past performance does not guarantee future results.
Which is riskier, FMHI or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 7.2% for FMHI. Worst drawdown: FMHI -18.8% vs QQQ -83.0%.
Should I hold both FMHI and QQQ?
FMHI and QQQ have a monthly-return correlation of 0.49, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FMHI and QQQ?
FMHI and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 590 unique securities.
Which pays a higher dividend, FMHI or QQQ?
FMHI yields 4.35% while QQQ yields 0.44%, so FMHI currently pays the higher dividend yield.
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