QDEF vs QQQ
FlexShares Quality Dividend Defensive Index Fund vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. QDEF offers more diversification with 137 holdings.
Side-by-Side Comparison
| Metric | QDEF | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.39% | 0.18% | |
| AUM | $564M | $496.3B | |
| Dividend Yield | 1.58% | 0.44% | |
| Holdings | 137 | 108 | |
| YTD Return | +12.94% | +16.64% | |
| 1Y Return | +19.71% | +27.27% | |
| 3Y Return (annualized) | +19.95% | +25.96% | |
| 5Y Return (annualized) | +12.57% | +14.54% | |
| Volatility (annualized) | 13.4% | 30.6% | |
| Max Drawdown | -36.2% | -83.0% | |
| Fund Family | Flexshares Trust | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Dec 14, 2012 | Mar 10, 1999 |
QDEF vs QQQ Performance
FlexShares Quality Dividend Defensive Index Fund (QDEF) is a ETF from Flexshares Trust and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year QDEF returned +19.71% while QQQ returned +27.27%. Year to date, QDEF is up 12.94% versus a gain of 16.64% for QQQ.
Over three years, QDEF compounded at +19.95% per year against +25.96% for QQQ; over five years the annualized figures are +12.57% and +14.54% respectively. Across the full 14-year window we track, QQQ has the edge at +13.03% annualized vs +10.66%. 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 13.4% for QDEF. 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 -36.2% for QDEF 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 0.79. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
QDEF 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, QDEF currently yields 1.58% against 0.44% for QQQ.
Holdings Overlap
QDEF and QQQ share 21 holdings out of 215 unique holdings combined, representing a 34.7% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, QDEF or QQQ?
QDEF 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, QDEF or QQQ?
Over the past year QDEF returned +19.71% vs +27.27% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (14 years), QDEF annualized +10.66% vs +13.03% for QQQ. Past performance does not guarantee future results.
Which is riskier, QDEF or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 13.4% for QDEF. Worst drawdown: QDEF -36.2% vs QQQ -83.0%.
Should I hold both QDEF and QQQ?
QDEF and QQQ have a monthly-return correlation of 0.79, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QDEF and QQQ?
QDEF and QQQ share 21 common holdings with a 34.7% weight overlap. Combined, they hold 215 unique securities.
Which pays a higher dividend, QDEF or QQQ?
QDEF yields 1.58% while QQQ yields 0.44%, so QDEF currently pays the higher dividend yield.
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