IYG vs QQQ
iShares US Financial Services 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 | IYG | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.38% | 0.18% | |
| AUM | $2.2B | $496.3B | |
| Dividend Yield | 1.03% | 0.44% | |
| Holdings | 104 | 108 | |
| YTD Return | +4.75% | +16.64% | |
| 1Y Return | +12.35% | +27.27% | |
| 3Y Return (annualized) | +24.24% | +25.96% | |
| 5Y Return (annualized) | +10.57% | +14.54% | |
| Volatility (annualized) | 21.6% | 30.6% | |
| Max Drawdown | -82.9% | -83.0% | |
| Fund Family | iShares by BlackRock (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Jun 12, 2000 | Mar 10, 1999 |
IYG vs QQQ Performance
iShares US Financial Services ETF (IYG) 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 IYG returned +12.35% while QQQ returned +27.27%. Year to date, IYG is up 4.75% versus a gain of 16.64% for QQQ.
Over three years, IYG compounded at +24.24% per year against +25.96% for QQQ; over five years the annualized figures are +10.57% and +14.54% respectively. Across the full 26-year window we track, QQQ has the edge at +13.03% annualized vs +5.31%. 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 21.6% for IYG. 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 -82.9% for IYG 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
IYG charges 0.38% per year while QQQ charges 0.18%. On a $10,000 position that is $38 vs $18 annually, a gap of $20 per year that compounds over a long holding period. On income, IYG currently yields 1.03% against 0.44% for QQQ.
Holdings Overlap
IYG and QQQ share 0 holdings out of 203 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, IYG or QQQ?
IYG has an expense ratio of 0.38% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $20 per year of difference.
Which performed better, IYG or QQQ?
Over the past year IYG returned +12.35% vs +27.27% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (26 years), IYG annualized +5.31% vs +13.03% for QQQ. Past performance does not guarantee future results.
Which is riskier, IYG or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 21.6% for IYG. Worst drawdown: IYG -82.9% vs QQQ -83.0%.
Should I hold both IYG and QQQ?
IYG 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 IYG and QQQ?
IYG and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 203 unique securities.
Which pays a higher dividend, IYG or QQQ?
IYG yields 1.03% while QQQ yields 0.44%, so IYG currently pays the higher dividend yield.
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