QQQ vs VAW
Invesco QQQ Trust, Series 1 vs Vanguard Materials ETF
Quick Verdict
VAW has a lower expense ratio. QQQ delivered stronger 1-year returns. VAW offers more diversification with 111 holdings.
Side-by-Side Comparison
| Metric | QQQ | VAW | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.09% | |
| AUM | $496.3B | $2.9B | |
| Dividend Yield | 0.44% | 1.39% | |
| Holdings | 108 | 111 | |
| YTD Return | +16.64% | +14.44% | |
| 1Y Return | +27.27% | +19.28% | |
| 3Y Return (annualized) | +25.96% | +12.37% | |
| 5Y Return (annualized) | +14.54% | +7.25% | |
| Volatility (annualized) | 30.6% | 20.4% | |
| Max Drawdown | -83.0% | -63.5% | |
| Fund Family | Invesco (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Jan 26, 2004 |
QQQ vs VAW Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and Vanguard Materials ETF (VAW) is a ETF from Vanguard (US). Over the past year QQQ returned +27.27% while VAW returned +19.28%. Year to date, QQQ is up 16.64% versus a gain of 14.44% for VAW.
Over three years, QQQ compounded at +25.96% per year against +12.37% for VAW; over five years the annualized figures are +14.54% and +7.25% respectively. Across the full 23-year window we track, QQQ has the edge at +13.03% annualized vs +7.72%. 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 20.4% for VAW. 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 -63.5% for VAW. 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 0.73. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
QQQ charges 0.18% per year while VAW charges 0.09%. On a $10,000 position that is $18 vs $9 annually, a gap of $9 per year that compounds over a long holding period. On income, QQQ currently yields 0.44% against 1.39% for VAW.
Holdings Overlap
QQQ and VAW share 1 holdings out of 212 unique holdings combined, representing a 1.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in QQQ | Weight in VAW | Difference |
|---|---|---|---|
| LIN | 1.00% | 15.72% | 14.72% |
Frequently Asked Questions
Which is cheaper, QQQ or VAW?
QQQ has an expense ratio of 0.18% while VAW charges 0.09%. VAW is the cheaper option. On a $10,000 investment, that is $9 per year of difference.
Which performed better, QQQ or VAW?
Over the past year QQQ returned +27.27% vs +19.28% for VAW, so QQQ leads on 1-year performance. Over the longest common window we track (23 years), QQQ annualized +13.03% vs +7.72% for VAW. Past performance does not guarantee future results.
Which is riskier, QQQ or VAW?
QQQ has been the more volatile fund at 30.6% annualized versus 20.4% for VAW. Worst drawdown: QQQ -83.0% vs VAW -63.5%.
Should I hold both QQQ and VAW?
QQQ and VAW have a monthly-return correlation of 0.73, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and VAW?
QQQ and VAW share 1 common holdings with a 1.0% weight overlap. Combined, they hold 212 unique securities.
Which pays a higher dividend, QQQ or VAW?
QQQ yields 0.44% while VAW yields 1.39%, so VAW currently pays the higher dividend yield.
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