LQDW vs QQQ
iShares Investment Grade Corporate Bond BuyWrite Strategy ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. LQDW offers more diversification with 3,135 holdings.
Side-by-Side Comparison
| Metric | LQDW | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.34% | 0.18% | |
| AUM | $319M | $496.3B | |
| Dividend Yield | 12.32% | 0.44% | |
| Holdings | 3,135 | 108 | |
| YTD Return | -5.09% | +16.64% | |
| 1Y Return | -3.35% | +27.27% | |
| 3Y Return (annualized) | +1.74% | +25.96% | |
| 5Y Return (annualized) | - | +14.54% | |
| Volatility (annualized) | 5.9% | 30.6% | |
| Max Drawdown | -9.2% | -83.0% | |
| Fund Family | iShares by BlackRock (US) | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Aug 18, 2022 | Mar 10, 1999 |
LQDW vs QQQ Performance
iShares Investment Grade Corporate Bond BuyWrite Strategy ETF (LQDW) 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 LQDW returned -3.35% while QQQ returned +27.27%. Year to date, LQDW is down 5.09% versus a gain of 16.64% for QQQ.
Over three years, LQDW compounded at +1.74% per year against +25.96% for QQQ. Across the full 4-year window we track, QQQ has the edge at +13.03% annualized vs +0.47%. 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 5.9% for LQDW. 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 -9.2% for LQDW 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 0.59. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
LQDW charges 0.34% per year while QQQ charges 0.18%. On a $10,000 position that is $34 vs $18 annually, a gap of $16 per year that compounds over a long holding period. On income, LQDW currently yields 12.32% against 0.44% for QQQ.
Holdings Overlap
LQDW and QQQ share 0 holdings out of 121 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, LQDW or QQQ?
LQDW has an expense ratio of 0.34% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $16 per year of difference.
Which performed better, LQDW or QQQ?
Over the past year LQDW returned -3.35% vs +27.27% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (4 years), LQDW annualized +0.47% vs +13.03% for QQQ. Past performance does not guarantee future results.
Which is riskier, LQDW or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 5.9% for LQDW. Worst drawdown: LQDW -9.2% vs QQQ -83.0%.
Should I hold both LQDW and QQQ?
LQDW and QQQ have a monthly-return correlation of 0.59, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between LQDW and QQQ?
LQDW and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 121 unique securities.
Which pays a higher dividend, LQDW or QQQ?
LQDW yields 12.32% while QQQ yields 0.44%, so LQDW currently pays the higher dividend yield.
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