IG vs QQQ
Principal Investment Grade Corporate ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. IG offers more diversification with 145 holdings.
Side-by-Side Comparison
| Metric | IG | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.19% | 0.18% | |
| AUM | $198M | $455.8B | |
| Dividend Yield | 5.07% | 0.41% | |
| Holdings | 248 | 108 | |
| YTD Return | -1.86% | +17.46% | |
| 1Y Return | +0.54% | +26.02% | |
| 3Y Return (annualized) | +4.74% | +25.51% | |
| 5Y Return (annualized) | -0.77% | +15.12% | |
| Volatility (annualized) | 8.0% | 30.6% | |
| Max Drawdown | -23.8% | -83.0% | |
| Fund Family | Principal Funds | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Apr 18, 2018 | Mar 10, 1999 |
IG vs QQQ Performance
Principal Investment Grade Corporate ETF (IG) is a ETF from Principal Funds and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year IG returned +0.54% while QQQ returned +26.02%. Year to date, IG is down 1.86% versus a gain of 17.46% for QQQ.
Over three years, IG compounded at +4.74% per year against +25.51% for QQQ; over five years the annualized figures are -0.77% and +15.12% respectively. Across the full 8-year window we track, QQQ has the edge at +13.08% annualized vs +0.55%. 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 8.0% for IG. 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 -23.8% for IG 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 0.61. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IG charges 0.19% per year while QQQ charges 0.18%. On a $10,000 position that is $19 vs $18 annually, a gap of $1 per year that compounds over a long holding period. On income, IG currently yields 5.07% against 0.41% for QQQ.
Holdings Overlap
IG and QQQ share 0 holdings out of 248 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, IG or QQQ?
IG has an expense ratio of 0.19% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, IG or QQQ?
Over the past year IG returned +0.54% vs +26.02% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (8 years), IG annualized +0.55% vs +13.08% for QQQ. Past performance does not guarantee future results.
Which is riskier, IG or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 8.0% for IG. Worst drawdown: IG -23.8% vs QQQ -83.0%.
Should I hold both IG and QQQ?
IG and QQQ have a monthly-return correlation of 0.61, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IG and QQQ?
IG and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 248 unique securities.
Which pays a higher dividend, IG or QQQ?
IG yields 5.07% while QQQ yields 0.41%, so IG currently pays the higher dividend yield.
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