QQQ vs USMC
Invesco QQQ Trust, Series 1 vs Principal U.S. Mega-Cap ETF
Quick Verdict
USMC has a lower expense ratio. QQQ delivered stronger 1-year returns. QQQ offers more diversification with 108 holdings.
Side-by-Side Comparison
| Metric | QQQ | USMC | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.12% | |
| AUM | $496.3B | $4.4B | |
| Dividend Yield | 0.44% | 0.76% | |
| Holdings | 108 | 29 | |
| YTD Return | +17.89% | +12.15% | |
| 1Y Return | +26.35% | +17.56% | |
| 3Y Return (annualized) | +26.02% | +21.20% | |
| 5Y Return (annualized) | +14.59% | +14.13% | |
| Volatility (annualized) | 30.6% | 15.4% | |
| Max Drawdown | -83.0% | -30.0% | |
| Fund Family | Invesco (US) | Principal Funds | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Oct 11, 2017 |
QQQ vs USMC Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and Principal U.S. Mega-Cap ETF (USMC) is a ETF from Principal Funds. Over the past year QQQ returned +26.35% while USMC returned +17.56%. Year to date, QQQ is up 17.89% versus a gain of 12.15% for USMC.
Over three years, QQQ compounded at +26.02% per year against +21.20% for USMC; over five years the annualized figures are +14.59% and +14.13% respectively. Across the full 9-year window we track, USMC has the edge at +14.30% annualized vs +13.07%. 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 15.4% for USMC. 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 -30.0% for USMC. 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 0.92. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
QQQ charges 0.18% per year while USMC charges 0.12%. On a $10,000 position that is $18 vs $12 annually, a gap of $6 per year that compounds over a long holding period. On income, QQQ currently yields 0.44% against 0.76% for USMC.
Holdings Overlap
QQQ and USMC share 12 holdings out of 117 unique holdings combined, representing a 43.4% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, QQQ or USMC?
QQQ has an expense ratio of 0.18% while USMC charges 0.12%. USMC is the cheaper option. On a $10,000 investment, that is $6 per year of difference.
Which performed better, QQQ or USMC?
Over the past year QQQ returned +26.35% vs +17.56% for USMC, so QQQ leads on 1-year performance. Over the longest common window we track (9 years), QQQ annualized +13.07% vs +14.30% for USMC. Past performance does not guarantee future results.
Which is riskier, QQQ or USMC?
QQQ has been the more volatile fund at 30.6% annualized versus 15.4% for USMC. Worst drawdown: QQQ -83.0% vs USMC -30.0%.
Should I hold both QQQ and USMC?
QQQ and USMC have a monthly-return correlation of 0.92, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between QQQ and USMC?
QQQ and USMC share 12 common holdings with a 43.4% weight overlap. Combined, they hold 117 unique securities.
Which pays a higher dividend, QQQ or USMC?
QQQ yields 0.44% while USMC yields 0.76%, so USMC currently pays the higher dividend yield.
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