QQQ vs VMLUX
Invesco QQQ Trust, Series 1 vs Vanguard Limited Term Tax-Exempt Fund admiral class
Which is better, QQQ or VMLUX?
Large Cap Growth against Municipal Bond.
VMLUX has a lower expense ratio.
MarketXLS is not an investment adviser. This comparison is generated automatically from market data and is for information only. A Best mark means the better reading on that one measure, not a recommendation to buy.
Side-by-Side Comparison
| Metric | QQQ | VMLUX |
|---|---|---|
| Expense Ratio | 0.18% | 0.09%Best |
| AUM | $498.6B | $34.5B |
| Dividend Yield | 0.42% | 3.20% |
| Holdings | 321 | 7,398 |
| YTD Price Return | +22.26% | -3.00% |
| 1Y Price Return | +23.75% | -3.09% |
| 3Y Price Return (annualized) | +28.32% | +0.44% |
| 5Y Price Return (annualized) | +16.30% | -0.97% |
| Volatility (annualized) | 20.9% | 3.0%Best |
| Max Drawdown | -35.6% | -8.1%Best |
| Fund Family | Invesco (US) | Vanguard (US) |
| Category | Equity | Tax Preferred |
| Style | Large Cap Growth | Municipal Bond |
| Inception | Mar 10, 1999 | Feb 12, 2001 |
Not shown on this pair: $10,000 over 5 years, Top 10 Weight.
A price return is not the return of a fund that pays its income out. The coupon or distribution never appears in the price, so the return rows carry no winner here. QQQ currently yields 0.42% and VMLUX 3.20%.
Volatility and max drawdown are measured over the window both funds cover: Oct 4, 2021 to Sep 30, 2026 (5 years).
QQQ vs VMLUX Performance
Invesco QQQ Trust, Series 1 (QQQ) is an ETF from Invesco (US) and Vanguard Limited Term Tax-Exempt Fund admiral class (VMLUX) is a mutual fund from Vanguard (US). Over the past year QQQ's price moved +23.75% and VMLUX's -3.09%, before the income each one paid out.
Over three years, QQQ compounded at +28.32% per year against +0.44% for VMLUX; over five years the annualized figures are +16.30% and -0.97% respectively.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
QQQ has been the more volatile fund, with annualized monthly volatility of 20.9% compared with 3.0% for VMLUX. 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 -35.6% for QQQ and -8.1% for VMLUX. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.55. They move together some of the time, and apart the rest.
Fees and Cost Over Time
QQQ charges 0.18% per year while VMLUX 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 0.42% against 3.20% for VMLUX.
Structure and taxes
VMLUX is a mutual fund and QQQ is an ETF. A mutual fund prices once a day at net asset value and may carry a purchase minimum. An ETF trades through the day at whatever the market pays for it.
In a taxable account the difference that usually matters is distributions. An ETF can meet redemptions in kind, so it rarely has to sell holdings and rarely passes a capital gain to the people who held it; a mutual fund that sells holdings to meet redemptions can distribute a realised gain at year end to everyone still in the fund, whether or not they sold anything themselves. In a tax-deferred account that difference largely disappears. Both are descriptions of how the two wrappers work, not a recommendation.
Tax-loss harvesting works on either wrapper.
Holdings Overlap
We hold position weights for 102 holdings in QQQ and 878 in VMLUX, totalling 99.9% and 24.4% of the two funds. The two books name no position in common, so there is no overlap percentage to show.
The two holdings books were reported 77 days apart, QQQ as of Sep 15, 2026 and VMLUX as of Jun 30, 2026, so some of the difference between them is the time between the two reports rather than the funds.
0 positions in common, counted across the 102 positions we hold weights for in QQQ and 878 in VMLUX, against full books of 321 and 7,398.
You are not choosing between two funds in isolation.
Whichever of QQQ and VMLUX you pick has to sit alongside everything else you own. Add the rest and see what the combination actually holds.
Free for up to 10 holdings. No account needed.
Frequently Asked Questions
Which is cheaper, QQQ or VMLUX?
QQQ has an expense ratio of 0.18% while VMLUX charges 0.09%. VMLUX is the cheaper option, by $9 a year on a $10,000 investment.
Which is riskier, QQQ or VMLUX?
QQQ has been the more volatile fund at 20.9% annualized versus 3.0% for VMLUX. Worst drawdown: QQQ -35.6% vs VMLUX -8.1%.
Should I hold both QQQ and VMLUX?
QQQ and VMLUX have a monthly-return correlation of 0.55, so their returns are far enough apart for the mix to behave differently from either one alone. This is information, not a recommendation.
Which pays a higher dividend, QQQ or VMLUX?
QQQ yields 0.42% while VMLUX yields 3.20%, so VMLUX currently pays the higher dividend yield.
Is it better to hold VMLUX or QQQ in a taxable account?
QQQ is an ETF and VMLUX is a mutual fund. An ETF can meet redemptions in kind, so it rarely distributes a capital gain to the people holding it. A mutual fund that sells holdings to meet redemptions can pass a realised gain to every holder at year end. In a tax-deferred account that difference largely disappears. This is information, not a recommendation.
Is VMLUX better than QQQ?
VMLUX has a lower expense ratio. Which one suits a particular account depends on what it is for. This is information, not a recommendation.