FREL vs QQQ
Fidelity MSCI Real Estate Index ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
FREL has a lower expense ratio. QQQ delivered stronger 1-year returns. FREL offers more diversification with 130 holdings.
Side-by-Side Comparison
| Metric | FREL | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.08% | 0.18% | |
| AUM | $1.5B | $496.3B | |
| Dividend Yield | 3.21% | 0.44% | |
| Holdings | 130 | 108 | |
| YTD Return | +13.95% | +15.47% | |
| 1Y Return | +11.85% | +24.44% | |
| 3Y Return (annualized) | +11.23% | +25.47% | |
| 5Y Return (annualized) | +2.50% | +14.22% | |
| Volatility (annualized) | 17.2% | 30.6% | |
| Max Drawdown | -43.5% | -83.0% | |
| Fund Family | Fidelity Investments (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Feb 2, 2015 | Mar 10, 1999 |
FREL vs QQQ Performance
Fidelity MSCI Real Estate Index ETF (FREL) is a ETF from Fidelity Investments (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year FREL returned +11.85% while QQQ returned +24.44%. Year to date, FREL is up 13.95% versus a gain of 15.47% for QQQ.
Over three years, FREL compounded at +11.23% per year against +25.47% for QQQ; over five years the annualized figures are +2.50% and +14.22% respectively. Across the full 12-year window we track, QQQ has the edge at +12.99% annualized vs +3.39%. 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 17.2% for FREL. 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 -43.5% for FREL 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 0.64. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FREL charges 0.08% per year while QQQ charges 0.18%. On a $10,000 position that is $8 vs $18 annually, a gap of $10 per year that compounds over a long holding period. On income, FREL currently yields 3.21% against 0.44% for QQQ.
Holdings Overlap
FREL and QQQ share 0 holdings out of 225 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, FREL or QQQ?
FREL has an expense ratio of 0.08% while QQQ charges 0.18%. FREL is the cheaper option. On a $10,000 investment, that is $10 per year of difference.
Which performed better, FREL or QQQ?
Over the past year FREL returned +11.85% vs +24.44% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (12 years), FREL annualized +3.39% vs +12.99% for QQQ. Past performance does not guarantee future results.
Which is riskier, FREL or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 17.2% for FREL. Worst drawdown: FREL -43.5% vs QQQ -83.0%.
Should I hold both FREL and QQQ?
FREL and QQQ have a monthly-return correlation of 0.64, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FREL and QQQ?
FREL and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 225 unique securities.
Which pays a higher dividend, FREL or QQQ?
FREL yields 3.21% while QQQ yields 0.44%, so FREL currently pays the higher dividend yield.
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