MSSM vs QQQ
Morgan Stanley Pathway Small-Mid Cap Equity ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. MSSM delivered stronger 1-year returns. MSSM offers more diversification with 2,229 holdings.
Side-by-Side Comparison
| Metric | MSSM | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.62% | 0.18% | |
| AUM | $738M | $496.3B | |
| Dividend Yield | 2.69% | 0.44% | |
| Holdings | 2,229 | 108 | |
| YTD Return | +20.74% | +19.52% | |
| 1Y Return | +31.15% | +26.68% | |
| 3Y Return (annualized) | - | +26.64% | |
| 5Y Return (annualized) | - | +15.36% | |
| Volatility (annualized) | 15.5% | 30.6% | |
| Max Drawdown | -24.2% | -83.0% | |
| Fund Family | Morgan Stanley | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Dec 9, 2024 | Mar 10, 1999 |
MSSM vs QQQ Performance
Morgan Stanley Pathway Small-Mid Cap Equity ETF (MSSM) is a ETF from Morgan Stanley and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year MSSM returned +31.15% while QQQ returned +26.68%. Year to date, MSSM is up 20.74% versus a gain of 19.52% for QQQ.
Risk: Volatility and Drawdowns
QQQ has been the more volatile fund, with annualized monthly volatility of 30.6% compared with 15.5% for MSSM. 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 -24.2% for MSSM 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 0.82. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
MSSM charges 0.62% per year while QQQ charges 0.18%. On a $10,000 position that is $62 vs $18 annually, a gap of $44 per year that compounds over a long holding period. On income, MSSM currently yields 2.69% against 0.44% for QQQ.
Holdings Overlap
MSSM and QQQ share 4 holdings out of 1501 unique holdings combined, representing a 1.5% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, MSSM or QQQ?
MSSM has an expense ratio of 0.62% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $44 per year of difference.
Which performed better, MSSM or QQQ?
Over the past year MSSM returned +31.15% vs +26.68% for QQQ, so MSSM leads on 1-year performance. Over the longest common window we track (2 years), MSSM annualized +16.03% vs +13.14% for QQQ. Past performance does not guarantee future results.
Which is riskier, MSSM or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 15.5% for MSSM. Worst drawdown: MSSM -24.2% vs QQQ -83.0%.
Should I hold both MSSM and QQQ?
MSSM and QQQ have a monthly-return correlation of 0.82, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MSSM and QQQ?
MSSM and QQQ share 4 common holdings with a 1.5% weight overlap. Combined, they hold 1501 unique securities.
Which pays a higher dividend, MSSM or QQQ?
MSSM yields 2.69% while QQQ yields 0.44%, so MSSM currently pays the higher dividend yield.
Popular ETF Comparisons
Get Full ETF Analytics
Access complete holdings data, overlap analysis, screener tools, and more with FundXLS.