GARP vs QQQ
iShares MSCI USA Quality GARP ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
GARP has a lower expense ratio. GARP delivered stronger 1-year returns. GARP offers more diversification with 135 holdings.
Side-by-Side Comparison
| Metric | GARP | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.15% | 0.18% | |
| AUM | $3.0B | $496.3B | |
| Dividend Yield | 0.27% | 0.44% | |
| Holdings | 135 | 108 | |
| YTD Return | +21.20% | +16.64% | |
| 1Y Return | +36.66% | +27.27% | |
| 3Y Return (annualized) | +32.68% | +25.96% | |
| 5Y Return (annualized) | +17.94% | +14.54% | |
| Volatility (annualized) | 20.5% | 30.6% | |
| Max Drawdown | -31.3% | -83.0% | |
| Fund Family | iShares by BlackRock (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Jan 14, 2020 | Mar 10, 1999 |
GARP vs QQQ Performance
iShares MSCI USA Quality GARP ETF (GARP) is a ETF from iShares by BlackRock (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year GARP returned +36.66% while QQQ returned +27.27%. Year to date, GARP is up 21.20% versus a gain of 16.64% for QQQ.
Over three years, GARP compounded at +32.68% per year against +25.96% for QQQ; over five years the annualized figures are +17.94% and +14.54% respectively. Across the full 7-year window we track, GARP has the edge at +20.49% annualized vs +13.03%. 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 20.5% for GARP. 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 -31.3% for GARP 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 0.97. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
GARP 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, GARP currently yields 0.27% against 0.44% for QQQ.
Holdings Overlap
GARP and QQQ share 40 holdings out of 194 unique holdings combined, representing a 45.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, GARP or QQQ?
GARP has an expense ratio of 0.15% while QQQ charges 0.18%. GARP is the cheaper option. On a $10,000 investment, that is $3 per year of difference.
Which performed better, GARP or QQQ?
Over the past year GARP returned +36.66% vs +27.27% for QQQ, so GARP leads on 1-year performance. Over the longest common window we track (7 years), GARP annualized +20.49% vs +13.03% for QQQ. Past performance does not guarantee future results.
Which is riskier, GARP or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 20.5% for GARP. Worst drawdown: GARP -31.3% vs QQQ -83.0%.
Should I hold both GARP and QQQ?
GARP and QQQ have a monthly-return correlation of 0.97, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between GARP and QQQ?
GARP and QQQ share 40 common holdings with a 45.0% weight overlap. Combined, they hold 194 unique securities.
Which pays a higher dividend, GARP or QQQ?
GARP yields 0.27% while QQQ yields 0.44%, so QQQ currently pays the higher dividend yield.
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