QQQ vs TAFI
Invesco QQQ Trust, Series 1 vs AB Tax Aware Short Duration Municipal ETF
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. TAFI offers more diversification with 179 holdings.
Side-by-Side Comparison
| Metric | QQQ | TAFI | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.27% | |
| AUM | $455.8B | $1.4B | |
| Dividend Yield | 0.41% | 2.98% | |
| Holdings | 108 | 624 | |
| YTD Return | +19.68% | +0.96% | |
| 1Y Return | +26.75% | +2.31% | |
| 3Y Return (annualized) | +26.25% | +3.48% | |
| 5Y Return (annualized) | +15.39% | - | |
| Volatility (annualized) | 30.6% | 2.3% | |
| Max Drawdown | -83.0% | -1.9% | |
| Fund Family | Invesco (US) | AllianceBernstein L.P. | |
| Category | Equity | Tax Preferred | |
| Inception | Mar 10, 1999 | Sep 13, 2022 |
QQQ vs TAFI Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and AB Tax Aware Short Duration Municipal ETF (TAFI) is a ETF from AllianceBernstein L.P.. Over the past year QQQ returned +26.75% while TAFI returned +2.31%. Year to date, QQQ is up 19.68% versus a gain of 0.96% for TAFI.
Over three years, QQQ compounded at +26.25% per year against +3.48% for TAFI. Across the full 4-year window we track, QQQ has the edge at +13.15% annualized vs +3.26%. 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 2.3% for TAFI. 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 -1.9% for TAFI. 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 0.48. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while TAFI charges 0.27%. On a $10,000 position that is $18 vs $27 annually, a gap of $9 per year that compounds over a long holding period. On income, QQQ currently yields 0.41% against 2.98% for TAFI.
Holdings Overlap
QQQ and TAFI share 0 holdings out of 282 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 TAFI?
QQQ has an expense ratio of 0.18% while TAFI charges 0.27%. QQQ is the cheaper option. On a $10,000 investment, that is $9 per year of difference.
Which performed better, QQQ or TAFI?
Over the past year QQQ returned +26.75% vs +2.31% for TAFI, so QQQ leads on 1-year performance. Over the longest common window we track (4 years), QQQ annualized +13.15% vs +3.26% for TAFI. Past performance does not guarantee future results.
Which is riskier, QQQ or TAFI?
QQQ has been the more volatile fund at 30.6% annualized versus 2.3% for TAFI. Worst drawdown: QQQ -83.0% vs TAFI -1.9%.
Should I hold both QQQ and TAFI?
QQQ and TAFI have a monthly-return correlation of 0.48, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and TAFI?
QQQ and TAFI share 0 common holdings with a 0.0% weight overlap. Combined, they hold 282 unique securities.
Which pays a higher dividend, QQQ or TAFI?
QQQ yields 0.41% while TAFI yields 2.98%, so TAFI currently pays the higher dividend yield.
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