QQQ vs SHY
Invesco QQQ Trust, Series 1 vs iShares 1-3 Year Treasury Bond ETF
Quick Verdict
SHY has a lower expense ratio. QQQ delivered stronger 1-year returns. QQQ offers more diversification with 108 holdings.
Side-by-Side Comparison
| Metric | QQQ | SHY | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.15% | |
| AUM | $496.3B | $25.5B | |
| Dividend Yield | 0.44% | 3.65% | |
| Holdings | 108 | 91 | |
| YTD Return | +16.64% | +1.02% | |
| 1Y Return | +27.27% | +2.83% | |
| 3Y Return (annualized) | +25.96% | +4.40% | |
| 5Y Return (annualized) | +14.54% | +1.93% | |
| Volatility (annualized) | 30.6% | 1.5% | |
| Max Drawdown | -83.0% | -6.1% | |
| Fund Family | Invesco (US) | iShares by BlackRock (US) | |
| Category | Equity | Fixed Income | |
| Inception | Mar 10, 1999 | Jul 22, 2002 |
QQQ vs SHY Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and iShares 1-3 Year Treasury Bond ETF (SHY) is a ETF from iShares by BlackRock (US). Over the past year QQQ returned +27.27% while SHY returned +2.83%. Year to date, QQQ is up 16.64% versus a gain of 1.02% for SHY.
Over three years, QQQ compounded at +25.96% per year against +4.40% for SHY; over five years the annualized figures are +14.54% and +1.93% respectively. Across the full 24-year window we track, QQQ has the edge at +13.03% annualized vs +0.65%. 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 1.5% for SHY. 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 -83.0% for QQQ and -6.1% for SHY. 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 -0.12. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while SHY charges 0.15%. On a $10,000 position that is $18 vs $15 annually, a gap of $3 per year that compounds over a long holding period. On income, QQQ currently yields 0.44% against 3.65% for SHY.
Holdings Overlap
QQQ and SHY share 0 holdings out of 172 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, QQQ or SHY?
QQQ has an expense ratio of 0.18% while SHY charges 0.15%. SHY is the cheaper option. On a $10,000 investment, that is $3 per year of difference.
Which performed better, QQQ or SHY?
Over the past year QQQ returned +27.27% vs +2.83% for SHY, so QQQ leads on 1-year performance. Over the longest common window we track (24 years), QQQ annualized +13.03% vs +0.65% for SHY. Past performance does not guarantee future results.
Which is riskier, QQQ or SHY?
QQQ has been the more volatile fund at 30.6% annualized versus 1.5% for SHY. Worst drawdown: QQQ -83.0% vs SHY -6.1%.
Should I hold both QQQ and SHY?
QQQ and SHY have a monthly-return correlation of -0.12, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and SHY?
QQQ and SHY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 172 unique securities.
Which pays a higher dividend, QQQ or SHY?
QQQ yields 0.44% while SHY yields 3.65%, so SHY currently pays the higher dividend yield.
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