QQQ vs SMBS
Invesco QQQ Trust, Series 1 vs Schwab Mortgage-Backed Securities ETF
Quick Verdict
SMBS has a lower expense ratio. QQQ delivered stronger 1-year returns. SMBS offers more diversification with 4,272 holdings.
Side-by-Side Comparison
| Metric | QQQ | SMBS | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.03% | |
| AUM | $496.3B | $6.5B | |
| Dividend Yield | 0.44% | 5.21% | |
| Holdings | 108 | 4,272 | |
| YTD Return | +16.64% | +0.28% | |
| 1Y Return | +27.27% | +3.79% | |
| 3Y Return (annualized) | +25.96% | - | |
| 5Y Return (annualized) | +14.54% | - | |
| Volatility (annualized) | 30.6% | 3.6% | |
| Max Drawdown | -83.0% | -3.2% | |
| Fund Family | Invesco (US) | Charles Schwab Asset Management | |
| Category | Equity | Fixed Income | |
| Inception | Mar 10, 1999 | Nov 19, 2024 |
QQQ vs SMBS Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and Schwab Mortgage-Backed Securities ETF (SMBS) is a ETF from Charles Schwab Asset Management. Over the past year QQQ returned +27.27% while SMBS returned +3.79%. Year to date, QQQ is up 16.64% versus a gain of 0.28% for SMBS.
Risk: Volatility and Drawdowns
QQQ has been the more volatile fund, with annualized monthly volatility of 30.6% compared with 3.6% for SMBS. 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 -3.2% for SMBS. 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 0.14. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while SMBS charges 0.03%. On a $10,000 position that is $18 vs $3 annually, a gap of $15 per year that compounds over a long holding period. On income, QQQ currently yields 0.44% against 5.21% for SMBS.
Holdings Overlap
QQQ and SMBS share 0 holdings out of 235 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 SMBS?
QQQ has an expense ratio of 0.18% while SMBS charges 0.03%. SMBS is the cheaper option. On a $10,000 investment, that is $15 per year of difference.
Which performed better, QQQ or SMBS?
Over the past year QQQ returned +27.27% vs +3.79% for SMBS, so QQQ leads on 1-year performance. Over the longest common window we track (2 years), QQQ annualized +13.03% vs +4.33% for SMBS. Past performance does not guarantee future results.
Which is riskier, QQQ or SMBS?
QQQ has been the more volatile fund at 30.6% annualized versus 3.6% for SMBS. Worst drawdown: QQQ -83.0% vs SMBS -3.2%.
Should I hold both QQQ and SMBS?
QQQ and SMBS have a monthly-return correlation of 0.14, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and SMBS?
QQQ and SMBS share 0 common holdings with a 0.0% weight overlap. Combined, they hold 235 unique securities.
Which pays a higher dividend, QQQ or SMBS?
QQQ yields 0.44% while SMBS yields 5.21%, so SMBS currently pays the higher dividend yield.
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