QQQ vs VSDM
Invesco QQQ Trust, Series 1 vs Vanguard Short Duration Tax-Exempt Bond ETF
Quick Verdict
VSDM has a lower expense ratio. QQQ delivered stronger 1-year returns. VSDM offers more diversification with 424 holdings.
Side-by-Side Comparison
| Metric | QQQ | VSDM | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.12% | |
| AUM | $455.8B | $763M | |
| Dividend Yield | 0.41% | 3.10% | |
| Holdings | 108 | 3,774 | |
| YTD Return | +19.68% | -0.21% | |
| 1Y Return | +26.75% | +1.40% | |
| 3Y Return (annualized) | +26.25% | - | |
| 5Y Return (annualized) | +15.39% | - | |
| Volatility (annualized) | 30.6% | 2.1% | |
| Max Drawdown | -83.0% | -2.0% | |
| Fund Family | Invesco (US) | Vanguard (US) | |
| Category | Equity | Tax Preferred | |
| Inception | Mar 10, 1999 | Nov 19, 2024 |
QQQ vs VSDM Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and Vanguard Short Duration Tax-Exempt Bond ETF (VSDM) is a ETF from Vanguard (US). Over the past year QQQ returned +26.75% while VSDM returned +1.40%. Year to date, QQQ is up 19.68% versus a loss of 0.21% for VSDM.
Risk: Volatility and Drawdowns
QQQ has been the more volatile fund, with annualized monthly volatility of 30.6% compared with 2.1% for VSDM. 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 -2.0% for VSDM. 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 0.41. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while VSDM charges 0.12%. On a $10,000 position that is $18 vs $12 annually, a gap of $6 per year that compounds over a long holding period. On income, QQQ currently yields 0.41% against 3.10% for VSDM.
Holdings Overlap
QQQ and VSDM share 0 holdings out of 527 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 VSDM?
QQQ has an expense ratio of 0.18% while VSDM charges 0.12%. VSDM is the cheaper option. On a $10,000 investment, that is $6 per year of difference.
Which performed better, QQQ or VSDM?
Over the past year QQQ returned +26.75% vs +1.40% for VSDM, so QQQ leads on 1-year performance. Over the longest common window we track (2 years), QQQ annualized +13.15% vs +3.47% for VSDM. Past performance does not guarantee future results.
Which is riskier, QQQ or VSDM?
QQQ has been the more volatile fund at 30.6% annualized versus 2.1% for VSDM. Worst drawdown: QQQ -83.0% vs VSDM -2.0%.
Should I hold both QQQ and VSDM?
QQQ and VSDM have a monthly-return correlation of 0.41, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and VSDM?
QQQ and VSDM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 527 unique securities.
Which pays a higher dividend, QQQ or VSDM?
QQQ yields 0.41% while VSDM yields 3.10%, so VSDM currently pays the higher dividend yield.
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