MFM vs QQQ
MFS Municipal Income Trust vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. MFM offers more diversification with 840 holdings.
Side-by-Side Comparison
| Metric | MFM | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 1.45% | 0.18% | |
| AUM | $250M | $496.3B | |
| Dividend Yield | 5.50% | 0.44% | |
| Holdings | 840 | 108 | |
| YTD Return | +3.16% | +16.23% | |
| 1Y Return | +11.01% | +26.23% | |
| 3Y Return (annualized) | +6.71% | +25.75% | |
| 5Y Return (annualized) | -1.43% | +14.78% | |
| Volatility (annualized) | 14.1% | 30.6% | |
| Max Drawdown | -64.8% | -83.0% | |
| Fund Family | MFS Investment Management | Invesco (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 25, 1986 | Mar 10, 1999 |
MFM vs QQQ Performance
MFS Municipal Income Trust (MFM) is a ETF from MFS Investment Management and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year MFM returned +11.01% while QQQ returned +26.23%. Year to date, MFM is up 3.16% versus a gain of 16.23% for QQQ.
Over three years, MFM compounded at +6.71% per year against +25.75% for QQQ; over five years the annualized figures are -1.43% and +14.78% respectively. Across the full 27-year window we track, QQQ has the edge at +13.02% annualized vs -1.08%. 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 14.1% for MFM. 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 -64.8% for MFM 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 0.18. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
MFM charges 1.45% per year while QQQ charges 0.18%. On a $10,000 position that is $145 vs $18 annually, a gap of $127 per year that compounds over a long holding period. On income, MFM currently yields 5.50% against 0.44% for QQQ.
Holdings Overlap
MFM and QQQ share 0 holdings out of 365 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, MFM or QQQ?
MFM has an expense ratio of 1.45% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $127 per year of difference.
Which performed better, MFM or QQQ?
Over the past year MFM returned +11.01% vs +26.23% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (27 years), MFM annualized -1.08% vs +13.02% for QQQ. Past performance does not guarantee future results.
Which is riskier, MFM or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 14.1% for MFM. Worst drawdown: MFM -64.8% vs QQQ -83.0%.
Should I hold both MFM and QQQ?
MFM and QQQ have a monthly-return correlation of 0.18, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MFM and QQQ?
MFM and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 365 unique securities.
Which pays a higher dividend, MFM or QQQ?
MFM yields 5.50% while QQQ yields 0.44%, so MFM currently pays the higher dividend yield.
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