IBHG vs QQQ
iShares iBonds 2027 Term High Yield and Income ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. QQQ offers more diversification with 108 holdings.
Side-by-Side Comparison
| Metric | IBHG | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.35% | 0.18% | |
| AUM | $517M | $496.3B | |
| Dividend Yield | 6.05% | 0.44% | |
| Holdings | 91 | 108 | |
| YTD Return | -1.41% | +16.64% | |
| 1Y Return | +0.09% | +27.27% | |
| 3Y Return (annualized) | +6.04% | +25.96% | |
| 5Y Return (annualized) | +2.95% | +14.54% | |
| Volatility (annualized) | 6.8% | 30.6% | |
| Max Drawdown | -13.8% | -83.0% | |
| Fund Family | iShares by BlackRock (US) | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jul 7, 2021 | Mar 10, 1999 |
IBHG vs QQQ Performance
iShares iBonds 2027 Term High Yield and Income ETF (IBHG) 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 IBHG returned +0.09% while QQQ returned +27.27%. Year to date, IBHG is down 1.41% versus a gain of 16.64% for QQQ.
Over three years, IBHG compounded at +6.04% per year against +25.96% for QQQ; over five years the annualized figures are +2.95% and +14.54% respectively. Across the full 5-year window we track, QQQ has the edge at +13.03% annualized vs +2.82%. 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 6.8% for IBHG. 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 -13.8% for IBHG 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 0.68. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IBHG charges 0.35% per year while QQQ charges 0.18%. On a $10,000 position that is $35 vs $18 annually, a gap of $17 per year that compounds over a long holding period. On income, IBHG currently yields 6.05% against 0.44% for QQQ.
Holdings Overlap
IBHG and QQQ share 0 holdings out of 187 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, IBHG or QQQ?
IBHG has an expense ratio of 0.35% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $17 per year of difference.
Which performed better, IBHG or QQQ?
Over the past year IBHG returned +0.09% vs +27.27% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (5 years), IBHG annualized +2.82% vs +13.03% for QQQ. Past performance does not guarantee future results.
Which is riskier, IBHG or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 6.8% for IBHG. Worst drawdown: IBHG -13.8% vs QQQ -83.0%.
Should I hold both IBHG and QQQ?
IBHG and QQQ have a monthly-return correlation of 0.68, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IBHG and QQQ?
IBHG and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 187 unique securities.
Which pays a higher dividend, IBHG or QQQ?
IBHG yields 6.05% while QQQ yields 0.44%, so IBHG currently pays the higher dividend yield.
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