FTHY vs QQQ
FTHY vs QQQ
First Trust High Yield Opportunities 2027 Term Fund vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. FTHY offers more diversification with 230 holdings.
Side-by-Side Comparison
| Metric | FTHY | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 3.59% | 0.18% | |
| AUM | $662M | $455.8B | |
| Dividend Yield | 10.63% | 0.41% | |
| Holdings | 294 | 108 | |
| YTD Return | +2.21% | +18.20% | |
| 1Y Return | +2.32% | +27.63% | |
| 3Y Return (annualized) | +10.46% | +25.54% | |
| 5Y Return (annualized) | +2.28% | +15.12% | |
| Volatility (annualized) | 11.9% | 30.6% | |
| Max Drawdown | -31.2% | -83.0% | |
| Fund Family | First Trust Portfolios (US) | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jun 25, 2020 | Mar 10, 1999 |
FTHY vs QQQ Performance
First Trust High Yield Opportunities 2027 Term Fund (FTHY) 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 FTHY returned +2.32% while QQQ returned +27.63%. Year to date, FTHY is up 2.21% versus a gain of 18.20% for QQQ.
Over three years, FTHY compounded at +10.46% per year against +25.54% for QQQ; over five years the annualized figures are +2.28% and +15.12% respectively. Across the full 6-year window we track, QQQ has the edge at +13.11% annualized vs +2.71%. 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 11.9% for FTHY. 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 -31.2% for FTHY 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 0.67. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FTHY charges 3.59% per year while QQQ charges 0.18%. On a $10,000 position that is $359 vs $18 annually, a gap of $341 per year that compounds over a long holding period. On income, FTHY currently yields 10.63% against 0.41% for QQQ.
Holdings Overlap
FTHY and QQQ share 0 holdings out of 333 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, FTHY or QQQ?
FTHY has an expense ratio of 3.59% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $341 per year of difference.
Which performed better, FTHY or QQQ?
Over the past year FTHY returned +2.32% vs +27.63% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (6 years), FTHY annualized +2.71% vs +13.11% for QQQ. Past performance does not guarantee future results.
Which is riskier, FTHY or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 11.9% for FTHY. Worst drawdown: FTHY -31.2% vs QQQ -83.0%.
Should I hold both FTHY and QQQ?
FTHY and QQQ have a monthly-return correlation of 0.67, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FTHY and QQQ?
FTHY and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 333 unique securities.
Which pays a higher dividend, FTHY or QQQ?
FTHY yields 10.63% while QQQ yields 0.41%, so FTHY currently pays the higher dividend yield.
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