QQQ vs VFMO
Invesco QQQ Trust, Series 1 vs Vanguard US Momentum Factor ETF
Quick Verdict
VFMO has a lower expense ratio. VFMO delivered stronger 1-year returns. VFMO offers more diversification with 668 holdings.
Side-by-Side Comparison
| Metric | QQQ | VFMO | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.13% | |
| AUM | $455.8B | $2.0B | |
| Dividend Yield | 0.41% | 0.82% | |
| Holdings | 108 | 674 | |
| YTD Return | +18.31% | +21.47% | |
| 1Y Return | +25.37% | +32.35% | |
| 3Y Return (annualized) | +25.79% | +26.09% | |
| 5Y Return (annualized) | +15.20% | +13.23% | |
| Volatility (annualized) | 30.6% | 20.4% | |
| Max Drawdown | -83.0% | -36.8% | |
| Fund Family | Invesco (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Feb 13, 2018 |
QQQ vs VFMO Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and Vanguard US Momentum Factor ETF (VFMO) is a ETF from Vanguard (US). Over the past year QQQ returned +25.37% while VFMO returned +32.35%. Year to date, QQQ is up 18.31% versus a gain of 21.47% for VFMO.
Over three years, QQQ compounded at +25.79% per year against +26.09% for VFMO; over five years the annualized figures are +15.20% and +13.23% respectively. Across the full 9-year window we track, VFMO has the edge at +15.07% annualized vs +13.10%. 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 VFMO. 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 -36.8% for VFMO. 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 0.81. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
QQQ charges 0.18% per year while VFMO charges 0.13%. On a $10,000 position that is $18 vs $13 annually, a gap of $5 per year that compounds over a long holding period. On income, QQQ currently yields 0.41% against 0.82% for VFMO.
Holdings Overlap
QQQ and VFMO share 28 holdings out of 743 unique holdings combined, representing a 10.6% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, QQQ or VFMO?
QQQ has an expense ratio of 0.18% while VFMO charges 0.13%. VFMO is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, QQQ or VFMO?
Over the past year QQQ returned +25.37% vs +32.35% for VFMO, so VFMO leads on 1-year performance. Over the longest common window we track (9 years), QQQ annualized +13.10% vs +15.07% for VFMO. Past performance does not guarantee future results.
Which is riskier, QQQ or VFMO?
QQQ has been the more volatile fund at 30.6% annualized versus 20.4% for VFMO. Worst drawdown: QQQ -83.0% vs VFMO -36.8%.
Should I hold both QQQ and VFMO?
QQQ and VFMO have a monthly-return correlation of 0.81, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and VFMO?
QQQ and VFMO share 28 common holdings with a 10.6% weight overlap. Combined, they hold 743 unique securities.
Which pays a higher dividend, QQQ or VFMO?
QQQ yields 0.41% while VFMO yields 0.82%, so VFMO currently pays the higher dividend yield.
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