QQQ vs VMO
Invesco QQQ Trust, Series 1 vs Invesco Municipal Opportunity Trust
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. VMO offers more diversification with 273 holdings.
Side-by-Side Comparison
| Metric | QQQ | VMO | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 1.86% | |
| AUM | $455.8B | $2,934.54 | |
| Dividend Yield | 0.41% | 7.43% | |
| Holdings | 108 | 544 | |
| YTD Return | +18.31% | +6.97% | |
| 1Y Return | +25.37% | +14.84% | |
| 3Y Return (annualized) | +25.79% | +9.04% | |
| 5Y Return (annualized) | +15.20% | -0.69% | |
| Volatility (annualized) | 30.6% | 12.2% | |
| Max Drawdown | -83.0% | -60.0% | |
| Fund Family | Invesco (US) | Invesco (US) | |
| Category | Equity | Tax Preferred | |
| Inception | Mar 10, 1999 | Apr 24, 1992 |
QQQ vs VMO Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and Invesco Municipal Opportunity Trust (VMO) is a ETF from Invesco (US). Over the past year QQQ returned +25.37% while VMO returned +14.84%. Year to date, QQQ is up 18.31% versus a gain of 6.97% for VMO.
Over three years, QQQ compounded at +25.79% per year against +9.04% for VMO; over five years the annualized figures are +15.20% and -0.69% respectively. Across the full 27-year window we track, QQQ has the edge at +13.10% annualized vs -0.05%. 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 12.2% for VMO. 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 -60.0% for VMO. 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 0.14. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while VMO charges 1.86%. On a $10,000 position that is $18 vs $186 annually, a gap of $168 per year that compounds over a long holding period. On income, QQQ currently yields 0.41% against 7.43% for VMO.
Holdings Overlap
QQQ and VMO share 0 holdings out of 376 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 VMO?
QQQ has an expense ratio of 0.18% while VMO charges 1.86%. QQQ is the cheaper option. On a $10,000 investment, that is $168 per year of difference.
Which performed better, QQQ or VMO?
Over the past year QQQ returned +25.37% vs +14.84% for VMO, so QQQ leads on 1-year performance. Over the longest common window we track (27 years), QQQ annualized +13.10% vs -0.05% for VMO. Past performance does not guarantee future results.
Which is riskier, QQQ or VMO?
QQQ has been the more volatile fund at 30.6% annualized versus 12.2% for VMO. Worst drawdown: QQQ -83.0% vs VMO -60.0%.
Should I hold both QQQ and VMO?
QQQ and VMO have a monthly-return correlation of 0.14, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and VMO?
QQQ and VMO share 0 common holdings with a 0.0% weight overlap. Combined, they hold 376 unique securities.
Which pays a higher dividend, QQQ or VMO?
QQQ yields 0.41% while VMO yields 7.43%, so VMO currently pays the higher dividend yield.
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