QQQ vs VMLUX
Invesco QQQ Trust, Series 1 vs Vanguard Limited Term Tax-Exempt Fund admiral class
Quick Verdict
VMLUX has a lower expense ratio. QQQ delivered stronger 1-year returns. VMLUX offers more diversification with 915 holdings.
Side-by-Side Comparison
| Metric | QQQ | VMLUX | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.09% | |
| AUM | $455.8B | $34.1B | |
| Dividend Yield | 0.41% | 2.89% | |
| Holdings | 108 | 7,110 | |
| YTD Return | +19.68% | -0.55% | |
| 1Y Return | +26.75% | -0.27% | |
| 3Y Return (annualized) | +26.25% | +0.81% | |
| 5Y Return (annualized) | +15.39% | -0.56% | |
| Volatility (annualized) | 30.6% | 2.8% | |
| Max Drawdown | -83.0% | -8.5% | |
| Fund Family | Invesco (US) | Vanguard (US) | |
| Category | Equity | Tax Preferred | |
| Inception | Mar 10, 1999 | Feb 12, 2001 |
QQQ vs VMLUX Performance
Invesco QQQ Trust, Series 1 (QQQ) is a 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 returned +26.75% while VMLUX returned -0.27%. Year to date, QQQ is up 19.68% versus a loss of 0.55% for VMLUX.
Over three years, QQQ compounded at +26.25% per year against +0.81% for VMLUX; over five years the annualized figures are +15.39% and -0.56% respectively. Across the full 5-year window we track, QQQ has the edge at +13.15% annualized vs -0.56%. 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 2.8% 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 -83.0% for QQQ and -8.5% for VMLUX. 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 0.59. They move independently enough that combining them can meaningfully diversify a portfolio.
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 0.41% against 2.89% for VMLUX.
Holdings Overlap
QQQ and VMLUX share 0 holdings out of 1018 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 VMLUX?
QQQ has an expense ratio of 0.18% while VMLUX charges 0.09%. VMLUX is the cheaper option. On a $10,000 investment, that is $9 per year of difference.
Which performed better, QQQ or VMLUX?
Over the past year QQQ returned +26.75% vs -0.27% for VMLUX, so QQQ leads on 1-year performance. Over the longest common window we track (5 years), QQQ annualized +13.15% vs -0.56% for VMLUX. Past performance does not guarantee future results.
Which is riskier, QQQ or VMLUX?
QQQ has been the more volatile fund at 30.6% annualized versus 2.8% for VMLUX. Worst drawdown: QQQ -83.0% vs VMLUX -8.5%.
Should I hold both QQQ and VMLUX?
QQQ and VMLUX have a monthly-return correlation of 0.59, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and VMLUX?
QQQ and VMLUX share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1018 unique securities.
Which pays a higher dividend, QQQ or VMLUX?
QQQ yields 0.41% while VMLUX yields 2.89%, so VMLUX currently pays the higher dividend yield.
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