IYZ vs QQQ
iShares US Telecommunications ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. IYZ delivered stronger 1-year returns. QQQ offers more diversification with 108 holdings.
Side-by-Side Comparison
| Metric | IYZ | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.37% | 0.18% | |
| AUM | $1.3B | $496.3B | |
| Dividend Yield | 1.74% | 0.44% | |
| Holdings | 28 | 108 | |
| YTD Return | +26.88% | +16.64% | |
| 1Y Return | +43.21% | +27.27% | |
| 3Y Return (annualized) | +27.68% | +25.96% | |
| 5Y Return (annualized) | +6.94% | +14.54% | |
| Volatility (annualized) | 19.4% | 30.6% | |
| Max Drawdown | -72.5% | -83.0% | |
| Fund Family | iShares by BlackRock (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | May 22, 2000 | Mar 10, 1999 |
IYZ vs QQQ Performance
iShares US Telecommunications ETF (IYZ) 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 IYZ returned +43.21% while QQQ returned +27.27%. Year to date, IYZ is up 26.88% versus a gain of 16.64% for QQQ.
Over three years, IYZ compounded at +27.68% per year against +25.96% for QQQ; over five years the annualized figures are +6.94% and +14.54% respectively. Across the full 26-year window we track, QQQ has the edge at +13.03% annualized vs +0.84%. 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 IYZ. 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 -72.5% for IYZ 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 0.65. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IYZ charges 0.37% per year while QQQ charges 0.18%. On a $10,000 position that is $37 vs $18 annually, a gap of $19 per year that compounds over a long holding period. On income, IYZ currently yields 1.74% against 0.44% for QQQ.
Holdings Overlap
IYZ and QQQ share 5 holdings out of 122 unique holdings combined, representing a 4.5% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, IYZ or QQQ?
IYZ has an expense ratio of 0.37% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $19 per year of difference.
Which performed better, IYZ or QQQ?
Over the past year IYZ returned +43.21% vs +27.27% for QQQ, so IYZ leads on 1-year performance. Over the longest common window we track (26 years), IYZ annualized +0.84% vs +13.03% for QQQ. Past performance does not guarantee future results.
Which is riskier, IYZ or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 19.4% for IYZ. Worst drawdown: IYZ -72.5% vs QQQ -83.0%.
Should I hold both IYZ and QQQ?
IYZ and QQQ have a monthly-return correlation of 0.65, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IYZ and QQQ?
IYZ and QQQ share 5 common holdings with a 4.5% weight overlap. Combined, they hold 122 unique securities.
Which pays a higher dividend, IYZ or QQQ?
IYZ yields 1.74% while QQQ yields 0.44%, so IYZ currently pays the higher dividend yield.
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