IWM vs QQQ
iShares Russell 2000 ETF vs Invesco QQQ Trust, Series 1
Which is better, IWM or QQQ?
Small Cap Blend against Large Cap Growth.
QQQ has a lower expense ratio. QQQ led over 1Y, 3Y, 5Y and the full window. IWM is less concentrated, with 3.2% of the fund in its ten largest positions against 47.2%.
MarketXLS is not an investment adviser. This comparison is generated automatically from market data and is for information only. A Best mark means the better reading on that one measure, not a recommendation to buy.
Side-by-Side Comparison
| Metric | IWM | QQQ |
|---|---|---|
| Expense Ratio | 0.19% | 0.18%Best |
| AUM | $77.6B | $498.6B |
| Dividend Yield | 0.90% | 0.42% |
| Holdings | 1,972 | 321 |
| YTD Return | +13.93% | +22.67%Best |
| 1Y Return | +16.54% | +24.33%Best |
| 3Y Return (annualized) | +19.38% | +29.05%Best |
| 5Y Return (annualized) | +6.34% | +17.00%Best |
| Volatility (annualized) | 19.9%Best | 22.4% |
| Max Drawdown | -59.9%Best | -80.5% |
| $10,000 over 5 years | $13,598 | $21,924Best |
| Top 10 Weight | 3.2%Best | 47.2% |
| Fund Family | iShares by BlackRock (US) | Invesco (US) |
| Category | Equity | Equity |
| Style | Small Cap Blend | Large Cap Growth |
| Inception | May 22, 2000 | Mar 10, 1999 |
Volatility and max drawdown are measured over the window both funds cover: May 26, 2000 to Oct 2, 2026 (26.4 years).
IWM vs QQQ growth
Month-end closes. Both lines start at 0% in the first month shown, so the gap between them is the difference in growth across that window. The full view covers the 26.4 years both funds cover.
IWM vs QQQ Performance
iShares Russell 2000 ETF (IWM) is an ETF from iShares by BlackRock (US) and Invesco QQQ Trust, Series 1 (QQQ) is an ETF from Invesco (US). Over the past year IWM returned +16.54% while QQQ returned +24.33%. Year to date, IWM is up 13.93% versus a gain of 22.67% for QQQ.
Over three years, IWM compounded at +19.38% per year against +29.05% for QQQ; over five years the annualized figures are +6.34% and +17.00% respectively. Across the full 26-year window we track, QQQ has the edge at +9.12% annualized vs +7.42%.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
QQQ has been the more volatile fund, with annualized monthly volatility of 22.4% compared with 19.9% for IWM. 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 -59.9% for IWM and -80.5% for QQQ. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.76. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
IWM 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, IWM currently yields 0.90% against 0.42% for QQQ.
Holdings Overlap
0.8% of QQQ's money is in holdings IWM also owns.
We cannot see either book well enough to say how much of this pair is duplicated.
1 positions in common, counted across the 1,949 positions we hold weights for in IWM and 102 in QQQ, against full books of 1,972 and 321.
What only one of them owns
Our book lists 95 positions for QQQ that do not appear in our book for IWM (97.0% of the fund), and 1,666 for IWM that do not appear in QQQ (94.8%).
Some of those will be the same company recorded under a different code in one of the two books, so the real difference in what you would own is no larger than this and may be smaller. We do not name the individual positions here for that reason.
Top Shared Holdings
| Stock | Weight in IWM | Weight in QQQ | Difference |
|---|---|---|---|
| GILDGilead Sciences Inc | 0.00% | 0.79% | 0.79% |
You are not choosing between two funds in isolation.
Whichever of IWM and QQQ you pick has to sit alongside everything else you own. Add the rest and see what the combination actually holds.
Free for up to 10 holdings. No account needed.
Frequently Asked Questions
Which is cheaper, IWM or QQQ?
IWM has an expense ratio of 0.19% while QQQ charges 0.18%. QQQ is the cheaper option, by $1 a year on a $10,000 investment.
Which performed better, IWM or QQQ?
Over the past year IWM returned +16.54% vs +24.33% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (26 years), IWM annualized +7.42% vs +9.12% for QQQ. Past performance does not guarantee future results. This is information, not a recommendation.
Which is riskier, IWM or QQQ?
QQQ has been the more volatile fund at 22.4% annualized versus 19.9% for IWM. Worst drawdown: IWM -59.9% vs QQQ -80.5%.
Should I hold both IWM and QQQ?
IWM and QQQ have a monthly-return correlation of 0.76, so their returns are far enough apart for the mix to behave differently from either one alone. This is information, not a recommendation.
Which pays a higher dividend, IWM or QQQ?
IWM yields 0.90% while QQQ yields 0.42%, so IWM currently pays the higher dividend yield.
Is QQQ better than IWM?
QQQ has a lower expense ratio. QQQ led over 1Y, 3Y, 5Y and the full window. IWM is less concentrated, with 3.2% of the fund in its ten largest positions against 47.2%. Which one suits a particular account depends on what it is for. This is information, not a recommendation.