MFDX vs QQQ
PIMCO RAFI Dynamic Multi-Factor International Equity ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. MFDX offers more diversification with 1,300 holdings.
Side-by-Side Comparison
| Metric | MFDX | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.39% | 0.18% | |
| AUM | $471M | $496.3B | |
| Dividend Yield | 2.88% | 0.44% | |
| Holdings | 1,300 | 108 | |
| YTD Return | +12.17% | +16.64% | |
| 1Y Return | +20.15% | +27.27% | |
| 3Y Return (annualized) | +19.90% | +25.96% | |
| 5Y Return (annualized) | +11.05% | +14.54% | |
| Volatility (annualized) | 14.9% | 30.6% | |
| Max Drawdown | -39.1% | -83.0% | |
| Fund Family | PIMCO (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Aug 31, 2017 | Mar 10, 1999 |
MFDX vs QQQ Performance
PIMCO RAFI Dynamic Multi-Factor International Equity ETF (MFDX) is a ETF from PIMCO (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year MFDX returned +20.15% while QQQ returned +27.27%. Year to date, MFDX is up 12.17% versus a gain of 16.64% for QQQ.
Over three years, MFDX compounded at +19.90% per year against +25.96% for QQQ; over five years the annualized figures are +11.05% and +14.54% respectively. Across the full 9-year window we track, QQQ has the edge at +13.03% annualized vs +8.16%. 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 14.9% for MFDX. 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 -39.1% for MFDX 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
MFDX charges 0.39% per year while QQQ charges 0.18%. On a $10,000 position that is $39 vs $18 annually, a gap of $21 per year that compounds over a long holding period. On income, MFDX currently yields 2.88% against 0.44% for QQQ.
Holdings Overlap
MFDX and QQQ share 2 holdings out of 1050 unique holdings combined, representing a 0.4% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, MFDX or QQQ?
MFDX has an expense ratio of 0.39% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $21 per year of difference.
Which performed better, MFDX or QQQ?
Over the past year MFDX returned +20.15% vs +27.27% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (9 years), MFDX annualized +8.16% vs +13.03% for QQQ. Past performance does not guarantee future results.
Which is riskier, MFDX or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 14.9% for MFDX. Worst drawdown: MFDX -39.1% vs QQQ -83.0%.
Should I hold both MFDX and QQQ?
MFDX 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 MFDX and QQQ?
MFDX and QQQ share 2 common holdings with a 0.4% weight overlap. Combined, they hold 1050 unique securities.
Which pays a higher dividend, MFDX or QQQ?
MFDX yields 2.88% while QQQ yields 0.44%, so MFDX currently pays the higher dividend yield.
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