GNMA vs QQQ
iShares GNMA Bond ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
GNMA has a lower expense ratio. QQQ delivered stronger 1-year returns. GNMA offers more diversification with 347 holdings.
Side-by-Side Comparison
| Metric | GNMA | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.10% | 0.18% | |
| AUM | $433M | $496.3B | |
| Dividend Yield | 4.28% | 0.44% | |
| Holdings | 347 | 108 | |
| YTD Return | +0.77% | +16.23% | |
| 1Y Return | +4.02% | +26.23% | |
| 3Y Return (annualized) | +5.22% | +25.75% | |
| 5Y Return (annualized) | +0.50% | +14.78% | |
| Volatility (annualized) | 4.5% | 30.6% | |
| Max Drawdown | -19.5% | -83.0% | |
| Fund Family | iShares by BlackRock (US) | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Feb 14, 2012 | Mar 10, 1999 |
GNMA vs QQQ Performance
iShares GNMA Bond ETF (GNMA) 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 GNMA returned +4.02% while QQQ returned +26.23%. Year to date, GNMA is up 0.77% versus a gain of 16.23% for QQQ.
Over three years, GNMA compounded at +5.22% per year against +25.75% for QQQ; over five years the annualized figures are +0.50% and +14.78% respectively. Across the full 15-year window we track, QQQ has the edge at +13.02% annualized vs +0.21%. 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 4.5% for GNMA. 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 -19.5% for GNMA 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 0.33. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
GNMA charges 0.10% per year while QQQ charges 0.18%. On a $10,000 position that is $10 vs $18 annually, a gap of $8 per year that compounds over a long holding period. On income, GNMA currently yields 4.28% against 0.44% for QQQ.
Holdings Overlap
GNMA and QQQ share 0 holdings out of 431 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, GNMA or QQQ?
GNMA has an expense ratio of 0.10% while QQQ charges 0.18%. GNMA is the cheaper option. On a $10,000 investment, that is $8 per year of difference.
Which performed better, GNMA or QQQ?
Over the past year GNMA returned +4.02% vs +26.23% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (15 years), GNMA annualized +0.21% vs +13.02% for QQQ. Past performance does not guarantee future results.
Which is riskier, GNMA or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 4.5% for GNMA. Worst drawdown: GNMA -19.5% vs QQQ -83.0%.
Should I hold both GNMA and QQQ?
GNMA and QQQ have a monthly-return correlation of 0.33, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between GNMA and QQQ?
GNMA and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 431 unique securities.
Which pays a higher dividend, GNMA or QQQ?
GNMA yields 4.28% while QQQ yields 0.44%, so GNMA currently pays the higher dividend yield.
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