FSMD vs QQQ
Fidelity Small-Mid Multifactor ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
FSMD has a lower expense ratio. QQQ delivered stronger 1-year returns. FSMD offers more diversification with 601 holdings.
Side-by-Side Comparison
| Metric | FSMD | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.15% | 0.18% | |
| AUM | $2.5B | $496.3B | |
| Dividend Yield | 1.25% | 0.44% | |
| Holdings | 601 | 108 | |
| YTD Return | +17.29% | +16.23% | |
| 1Y Return | +22.99% | +26.23% | |
| 3Y Return (annualized) | +17.61% | +25.75% | |
| 5Y Return (annualized) | +10.57% | +14.78% | |
| Volatility (annualized) | 19.1% | 30.6% | |
| Max Drawdown | -40.9% | -83.0% | |
| Fund Family | Fidelity Investments (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Feb 26, 2019 | Mar 10, 1999 |
FSMD vs QQQ Performance
Fidelity Small-Mid Multifactor ETF (FSMD) is a ETF from Fidelity Investments (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year FSMD returned +22.99% while QQQ returned +26.23%. Year to date, FSMD is up 17.29% versus a gain of 16.23% for QQQ.
Over three years, FSMD compounded at +17.61% per year against +25.75% for QQQ; over five years the annualized figures are +10.57% and +14.78% respectively. Across the full 8-year window we track, QQQ has the edge at +13.02% annualized vs +11.44%. 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 19.1% for FSMD. 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 -40.9% for FSMD 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 0.72. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FSMD charges 0.15% per year while QQQ charges 0.18%. On a $10,000 position that is $15 vs $18 annually, a gap of $3 per year that compounds over a long holding period. On income, FSMD currently yields 1.25% against 0.44% for QQQ.
Holdings Overlap
Frequently Asked Questions
Which is cheaper, FSMD or QQQ?
FSMD has an expense ratio of 0.15% while QQQ charges 0.18%. FSMD is the cheaper option. On a $10,000 investment, that is $3 per year of difference.
Which performed better, FSMD or QQQ?
Over the past year FSMD returned +22.99% vs +26.23% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (8 years), FSMD annualized +11.44% vs +13.02% for QQQ. Past performance does not guarantee future results.
Which is riskier, FSMD or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 19.1% for FSMD. Worst drawdown: FSMD -40.9% vs QQQ -83.0%.
Should I hold both FSMD and QQQ?
FSMD and QQQ have a monthly-return correlation of 0.72, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FSMD and QQQ?
FSMD and QQQ share 2 common holdings with a 1.2% weight overlap. Combined, they hold 672 unique securities.
Which pays a higher dividend, FSMD or QQQ?
FSMD yields 1.25% while QQQ yields 0.44%, so FSMD currently pays the higher dividend yield.
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