HPS vs QQQ
John Hancock Preferred Income Fund III vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. HPS offers more diversification with 175 holdings.
Side-by-Side Comparison
| Metric | HPS | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 1.81% | 0.18% | |
| AUM | $474M | $496.3B | |
| Dividend Yield | 9.76% | 0.44% | |
| Holdings | 175 | 108 | |
| YTD Return | +2.23% | +16.23% | |
| 1Y Return | +3.83% | +26.23% | |
| 3Y Return (annualized) | +9.82% | +25.75% | |
| 5Y Return (annualized) | +2.36% | +14.78% | |
| Volatility (annualized) | 19.4% | 30.6% | |
| Max Drawdown | -77.7% | -83.0% | |
| Fund Family | John Hancock Investment Management | Invesco (US) | |
| Category | Allocation/Balanced | Equity | |
| Inception | Jun 18, 2003 | Mar 10, 1999 |
HPS vs QQQ Performance
John Hancock Preferred Income Fund III (HPS) is a ETF from John Hancock Investment Management and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year HPS returned +3.83% while QQQ returned +26.23%. Year to date, HPS is up 2.23% versus a gain of 16.23% for QQQ.
Over three years, HPS compounded at +9.82% per year against +25.75% for QQQ; over five years the annualized figures are +2.36% and +14.78% respectively. Across the full 23-year window we track, QQQ has the edge at +13.02% annualized vs -0.48%. 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 19.4% for HPS. 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 -77.7% for HPS 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 0.42. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
HPS charges 1.81% per year while QQQ charges 0.18%. On a $10,000 position that is $181 vs $18 annually, a gap of $163 per year that compounds over a long holding period. On income, HPS currently yields 9.76% against 0.44% for QQQ.
Holdings Overlap
Frequently Asked Questions
Which is cheaper, HPS or QQQ?
HPS has an expense ratio of 1.81% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $163 per year of difference.
Which performed better, HPS or QQQ?
Over the past year HPS returned +3.83% vs +26.23% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (23 years), HPS annualized -0.48% vs +13.02% for QQQ. Past performance does not guarantee future results.
Which is riskier, HPS or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 19.4% for HPS. Worst drawdown: HPS -77.7% vs QQQ -83.0%.
Should I hold both HPS and QQQ?
HPS and QQQ have a monthly-return correlation of 0.42, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between HPS and QQQ?
HPS and QQQ share 2 common holdings with a 0.3% weight overlap. Combined, they hold 195 unique securities.
Which pays a higher dividend, HPS or QQQ?
HPS yields 9.76% while QQQ yields 0.44%, so HPS currently pays the higher dividend yield.
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