PREF vs QQQ
Principal Spectrum Preferred Securities Active ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. PREF offers more diversification with 113 holdings.
Side-by-Side Comparison
| Metric | PREF | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.55% | 0.18% | |
| AUM | $1.8B | $455.8B | |
| Dividend Yield | 5.13% | 0.41% | |
| Holdings | 153 | 108 | |
| YTD Return | +1.35% | +17.85% | |
| 1Y Return | +4.53% | +26.45% | |
| 3Y Return (annualized) | +8.15% | +26.07% | |
| 5Y Return (annualized) | +2.65% | +15.16% | |
| Volatility (annualized) | 7.8% | 30.6% | |
| Max Drawdown | -23.3% | -83.0% | |
| Fund Family | Principal Funds | Invesco (US) | |
| Category | Allocation/Balanced | Equity | |
| Inception | Jul 10, 2017 | Mar 10, 1999 |
PREF vs QQQ Performance
Principal Spectrum Preferred Securities Active ETF (PREF) is a ETF from Principal Funds and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year PREF returned +4.53% while QQQ returned +26.45%. Year to date, PREF is up 1.35% versus a gain of 17.85% for QQQ.
Over three years, PREF compounded at +8.15% per year against +26.07% for QQQ; over five years the annualized figures are +2.65% and +15.16% respectively. Across the full 9-year window we track, QQQ has the edge at +13.09% annualized vs +2.06%. 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 7.8% for PREF. 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 -23.3% for PREF 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 0.62. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
PREF charges 0.55% per year while QQQ charges 0.18%. On a $10,000 position that is $55 vs $18 annually, a gap of $37 per year that compounds over a long holding period. On income, PREF currently yields 5.13% against 0.41% for QQQ.
Holdings Overlap
PREF and QQQ share 0 holdings out of 216 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, PREF or QQQ?
PREF has an expense ratio of 0.55% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $37 per year of difference.
Which performed better, PREF or QQQ?
Over the past year PREF returned +4.53% vs +26.45% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (9 years), PREF annualized +2.06% vs +13.09% for QQQ. Past performance does not guarantee future results.
Which is riskier, PREF or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 7.8% for PREF. Worst drawdown: PREF -23.3% vs QQQ -83.0%.
Should I hold both PREF and QQQ?
PREF and QQQ have a monthly-return correlation of 0.62, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between PREF and QQQ?
PREF and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 216 unique securities.
Which pays a higher dividend, PREF or QQQ?
PREF yields 5.13% while QQQ yields 0.41%, so PREF currently pays the higher dividend yield.
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