MGC vs QQQ
Vanguard Mega Cap ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
MGC has a lower expense ratio. QQQ delivered stronger 1-year returns. MGC offers more diversification with 173 holdings.
Side-by-Side Comparison
| Metric | MGC | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.05% | 0.18% | |
| AUM | $10.0B | $455.8B | |
| Dividend Yield | 1.15% | 0.41% | |
| Holdings | 176 | 108 | |
| YTD Return | +13.99% | +19.68% | |
| 1Y Return | +22.35% | +26.75% | |
| 3Y Return (annualized) | +23.05% | +26.25% | |
| 5Y Return (annualized) | +13.88% | +15.39% | |
| Volatility (annualized) | 15.7% | 30.6% | |
| Max Drawdown | -53.0% | -83.0% | |
| Fund Family | Vanguard (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Dec 17, 2007 | Mar 10, 1999 |
MGC vs QQQ Performance
Vanguard Mega Cap ETF (MGC) is a ETF from Vanguard (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year MGC returned +22.35% while QQQ returned +26.75%. Year to date, MGC is up 13.99% versus a gain of 19.68% for QQQ.
Over three years, MGC compounded at +23.05% per year against +26.25% for QQQ; over five years the annualized figures are +13.88% and +15.39% respectively. Across the full 19-year window we track, QQQ has the edge at +13.15% annualized vs +10.12%. 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 15.7% for MGC. 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 -53.0% for MGC 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 0.92. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
MGC charges 0.05% per year while QQQ charges 0.18%. On a $10,000 position that is $5 vs $18 annually, a gap of $13 per year that compounds over a long holding period. On income, MGC currently yields 1.15% against 0.41% for QQQ.
Holdings Overlap
MGC and QQQ share 56 holdings out of 220 unique holdings combined, representing a 55.5% weight overlap.
High overlap means holding both may not provide much additional diversification.
Frequently Asked Questions
Which is cheaper, MGC or QQQ?
MGC has an expense ratio of 0.05% while QQQ charges 0.18%. MGC is the cheaper option. On a $10,000 investment, that is $13 per year of difference.
Which performed better, MGC or QQQ?
Over the past year MGC returned +22.35% vs +26.75% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (19 years), MGC annualized +10.12% vs +13.15% for QQQ. Past performance does not guarantee future results.
Which is riskier, MGC or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 15.7% for MGC. Worst drawdown: MGC -53.0% vs QQQ -83.0%.
Should I hold both MGC and QQQ?
MGC and QQQ have a monthly-return correlation of 0.92, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between MGC and QQQ?
MGC and QQQ share 56 common holdings with a 55.5% weight overlap. Combined, they hold 220 unique securities.
Which pays a higher dividend, MGC or QQQ?
MGC yields 1.15% while QQQ yields 0.41%, so MGC currently pays the higher dividend yield.
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