MSLC vs QQQ
Morgan Stanley Pathway Large Cap Equity ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. MSLC offers more diversification with 789 holdings.
Side-by-Side Comparison
| Metric | MSLC | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.39% | 0.18% | |
| AUM | $3.9B | $496.3B | |
| Dividend Yield | 1.97% | 0.44% | |
| Holdings | 789 | 108 | |
| YTD Return | +11.28% | +16.19% | |
| 1Y Return | +17.23% | +25.22% | |
| 3Y Return (annualized) | - | +25.47% | |
| 5Y Return (annualized) | - | +14.34% | |
| Volatility (annualized) | 12.4% | 30.6% | |
| Max Drawdown | -17.9% | -83.0% | |
| Fund Family | Morgan Stanley | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Dec 9, 2024 | Mar 10, 1999 |
MSLC vs QQQ Performance
Morgan Stanley Pathway Large Cap Equity ETF (MSLC) is a ETF from Morgan Stanley and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year MSLC returned +17.23% while QQQ returned +25.22%. Year to date, MSLC is up 11.28% versus a gain of 16.19% for QQQ.
Risk: Volatility and Drawdowns
QQQ has been the more volatile fund, with annualized monthly volatility of 30.6% compared with 12.4% for MSLC. 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 -17.9% for MSLC 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 0.90. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
MSLC 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, MSLC currently yields 1.97% against 0.44% for QQQ.
Holdings Overlap
MSLC and QQQ share 88 holdings out of 747 unique holdings combined, representing a 46.9% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, MSLC or QQQ?
MSLC 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, MSLC or QQQ?
Over the past year MSLC returned +17.23% vs +25.22% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (2 years), MSLC annualized +13.83% vs +13.01% for QQQ. Past performance does not guarantee future results.
Which is riskier, MSLC or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 12.4% for MSLC. Worst drawdown: MSLC -17.9% vs QQQ -83.0%.
Should I hold both MSLC and QQQ?
MSLC and QQQ have a monthly-return correlation of 0.90, 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 MSLC and QQQ?
MSLC and QQQ share 88 common holdings with a 46.9% weight overlap. Combined, they hold 747 unique securities.
Which pays a higher dividend, MSLC or QQQ?
MSLC yields 1.97% while QQQ yields 0.44%, so MSLC currently pays the higher dividend yield.
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