MFEM vs QQQ
PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. MFEM delivered stronger 1-year returns. MFEM offers more diversification with 701 holdings.
Side-by-Side Comparison
| Metric | MFEM | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.49% | 0.18% | |
| AUM | $156M | $496.3B | |
| Dividend Yield | 2.39% | 0.44% | |
| Holdings | 701 | 108 | |
| YTD Return | +21.80% | +16.64% | |
| 1Y Return | +33.81% | +27.27% | |
| 3Y Return (annualized) | +20.43% | +25.96% | |
| 5Y Return (annualized) | +8.97% | +14.54% | |
| Volatility (annualized) | 17.7% | 30.6% | |
| Max Drawdown | -45.3% | -83.0% | |
| Fund Family | PIMCO (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Aug 31, 2017 | Mar 10, 1999 |
MFEM vs QQQ Performance
PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF (MFEM) is a ETF from PIMCO (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year MFEM returned +33.81% while QQQ returned +27.27%. Year to date, MFEM is up 21.80% versus a gain of 16.64% for QQQ.
Over three years, MFEM compounded at +20.43% per year against +25.96% for QQQ; over five years the annualized figures are +8.97% and +14.54% respectively. Across the full 9-year window we track, QQQ has the edge at +13.03% annualized vs +6.84%. 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 17.7% for MFEM. 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 -45.3% for MFEM 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
MFEM charges 0.49% per year while QQQ charges 0.18%. On a $10,000 position that is $49 vs $18 annually, a gap of $31 per year that compounds over a long holding period. On income, MFEM currently yields 2.39% against 0.44% for QQQ.
Holdings Overlap
MFEM and QQQ share 1 holdings out of 604 unique holdings combined, representing a 0.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in MFEM | Weight in QQQ | Difference |
|---|---|---|---|
| PDD:IE | 0.46% | 0.27% | 0.19% |
Frequently Asked Questions
Which is cheaper, MFEM or QQQ?
MFEM has an expense ratio of 0.49% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $31 per year of difference.
Which performed better, MFEM or QQQ?
Over the past year MFEM returned +33.81% vs +27.27% for QQQ, so MFEM leads on 1-year performance. Over the longest common window we track (9 years), MFEM annualized +6.84% vs +13.03% for QQQ. Past performance does not guarantee future results.
Which is riskier, MFEM or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 17.7% for MFEM. Worst drawdown: MFEM -45.3% vs QQQ -83.0%.
Should I hold both MFEM and QQQ?
MFEM 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 MFEM and QQQ?
MFEM and QQQ share 1 common holdings with a 0.3% weight overlap. Combined, they hold 604 unique securities.
Which pays a higher dividend, MFEM or QQQ?
MFEM yields 2.39% while QQQ yields 0.44%, so MFEM currently pays the higher dividend yield.
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