QQQ vs SMH
Invesco QQQ Trust, Series 1 vs VanEck Semiconductor ETF
Quick Verdict
QQQ has a lower expense ratio. SMH delivered stronger 1-year returns. QQQ offers more diversification with 108 holdings.
Side-by-Side Comparison
| Metric | QQQ | SMH | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.35% | |
| AUM | $496.3B | $60.9B | |
| Dividend Yield | 0.44% | 0.22% | |
| Holdings | 108 | 27 | |
| YTD Return | +16.64% | +50.13% | |
| 1Y Return | +27.27% | +95.56% | |
| 3Y Return (annualized) | +25.96% | +56.08% | |
| 5Y Return (annualized) | +14.54% | +34.42% | |
| Volatility (annualized) | 30.6% | 31.4% | |
| Max Drawdown | -83.0% | -85.5% | |
| Fund Family | Invesco (US) | VanEck | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Dec 20, 2011 |
QQQ vs SMH Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and VanEck Semiconductor ETF (SMH) is a ETF from VanEck. Over the past year QQQ returned +27.27% while SMH returned +95.56%. Year to date, QQQ is up 16.64% versus a gain of 50.13% for SMH.
Over three years, QQQ compounded at +25.96% per year against +56.08% for SMH; over five years the annualized figures are +14.54% and +34.42% respectively. Across the full 26-year window we track, QQQ has the edge at +13.03% annualized vs +11.22%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SMH has been the more volatile fund, with annualized monthly volatility of 31.4% compared with 30.6% for QQQ. 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 -85.5% for SMH. 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 0.87. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
QQQ charges 0.18% per year while SMH charges 0.35%. On a $10,000 position that is $18 vs $35 annually, a gap of $17 per year that compounds over a long holding period. On income, QQQ currently yields 0.44% against 0.22% for SMH.
Holdings Overlap
QQQ and SMH share 21 holdings out of 106 unique holdings combined, representing a 33.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, QQQ or SMH?
QQQ has an expense ratio of 0.18% while SMH charges 0.35%. QQQ is the cheaper option. On a $10,000 investment, that is $17 per year of difference.
Which performed better, QQQ or SMH?
Over the past year QQQ returned +27.27% vs +95.56% for SMH, so SMH leads on 1-year performance. Over the longest common window we track (26 years), QQQ annualized +13.03% vs +11.22% for SMH. Past performance does not guarantee future results.
Which is riskier, QQQ or SMH?
SMH has been the more volatile fund at 31.4% annualized versus 30.6% for QQQ. Worst drawdown: QQQ -83.0% vs SMH -85.5%.
Should I hold both QQQ and SMH?
QQQ and SMH have a monthly-return correlation of 0.87, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and SMH?
QQQ and SMH share 21 common holdings with a 33.0% weight overlap. Combined, they hold 106 unique securities.
Which pays a higher dividend, QQQ or SMH?
QQQ yields 0.44% while SMH yields 0.22%, so QQQ currently pays the higher dividend yield.
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