QQQ vs VTES
Invesco QQQ Trust, Series 1 vs Vanguard Short-Term Tax-Exempt Bond ETF
Quick Verdict
VTES has a lower expense ratio. QQQ delivered stronger 1-year returns. VTES offers more diversification with 1031 holdings.
Side-by-Side Comparison
| Metric | QQQ | VTES | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.05% | |
| AUM | $455.8B | $2.1B | |
| Dividend Yield | 0.41% | 2.74% | |
| Holdings | 108 | 3,067 | |
| YTD Return | +19.68% | +0.69% | |
| 1Y Return | +26.75% | +1.86% | |
| 3Y Return (annualized) | +26.25% | +3.05% | |
| 5Y Return (annualized) | +15.39% | - | |
| Volatility (annualized) | 30.6% | 2.3% | |
| Max Drawdown | -83.0% | -2.4% | |
| Fund Family | Invesco (US) | Vanguard (US) | |
| Category | Equity | Tax Preferred | |
| Inception | Mar 10, 1999 | Mar 7, 2023 |
QQQ vs VTES Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and Vanguard Short-Term Tax-Exempt Bond ETF (VTES) is a ETF from Vanguard (US). Over the past year QQQ returned +26.75% while VTES returned +1.86%. Year to date, QQQ is up 19.68% versus a gain of 0.69% for VTES.
Over three years, QQQ compounded at +26.25% per year against +3.05% for VTES. Across the full 3-year window we track, QQQ has the edge at +13.15% annualized vs +2.86%. 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 2.3% for VTES. 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 -2.4% for VTES. 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 0.49. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while VTES charges 0.05%. On a $10,000 position that is $18 vs $5 annually, a gap of $13 per year that compounds over a long holding period. On income, QQQ currently yields 0.41% against 2.74% for VTES.
Holdings Overlap
QQQ and VTES share 0 holdings out of 1134 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 VTES?
QQQ has an expense ratio of 0.18% while VTES charges 0.05%. VTES is the cheaper option. On a $10,000 investment, that is $13 per year of difference.
Which performed better, QQQ or VTES?
Over the past year QQQ returned +26.75% vs +1.86% for VTES, so QQQ leads on 1-year performance. Over the longest common window we track (3 years), QQQ annualized +13.15% vs +2.86% for VTES. Past performance does not guarantee future results.
Which is riskier, QQQ or VTES?
QQQ has been the more volatile fund at 30.6% annualized versus 2.3% for VTES. Worst drawdown: QQQ -83.0% vs VTES -2.4%.
Should I hold both QQQ and VTES?
QQQ and VTES have a monthly-return correlation of 0.49, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and VTES?
QQQ and VTES share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1134 unique securities.
Which pays a higher dividend, QQQ or VTES?
QQQ yields 0.41% while VTES yields 2.74%, so VTES currently pays the higher dividend yield.
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