QQQ vs VTWO
Invesco QQQ Trust, Series 1 vs Vanguard Russell 2000 ETF
Quick Verdict
VTWO has a lower expense ratio. VTWO delivered stronger 1-year returns. VTWO offers more diversification with 1943 holdings.
Side-by-Side Comparison
| Metric | QQQ | VTWO | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.06% | |
| AUM | $455.8B | $17.9B | |
| Dividend Yield | 0.41% | 1.39% | |
| Holdings | 108 | 1,970 | |
| YTD Return | +17.85% | +21.22% | |
| 1Y Return | +26.45% | +37.85% | |
| 3Y Return (annualized) | +26.07% | +17.82% | |
| 5Y Return (annualized) | +15.16% | +7.66% | |
| Volatility (annualized) | 30.6% | 19.1% | |
| Max Drawdown | -83.0% | -42.4% | |
| Fund Family | Invesco (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Sep 20, 2010 |
QQQ vs VTWO Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and Vanguard Russell 2000 ETF (VTWO) is a ETF from Vanguard (US). Over the past year QQQ returned +26.45% while VTWO returned +37.85%. Year to date, QQQ is up 17.85% versus a gain of 21.22% for VTWO.
Over three years, QQQ compounded at +26.07% per year against +17.82% for VTWO; over five years the annualized figures are +15.16% and +7.66% respectively. Across the full 16-year window we track, QQQ has the edge at +13.09% annualized vs +10.73%. 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 19.1% for VTWO. 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 -42.4% for VTWO. 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 0.74. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
QQQ charges 0.18% per year while VTWO charges 0.06%. On a $10,000 position that is $18 vs $6 annually, a gap of $12 per year that compounds over a long holding period. On income, QQQ currently yields 0.41% against 1.39% for VTWO.
Holdings Overlap
QQQ and VTWO share 0 holdings out of 2046 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 VTWO?
QQQ has an expense ratio of 0.18% while VTWO charges 0.06%. VTWO is the cheaper option. On a $10,000 investment, that is $12 per year of difference.
Which performed better, QQQ or VTWO?
Over the past year QQQ returned +26.45% vs +37.85% for VTWO, so VTWO leads on 1-year performance. Over the longest common window we track (16 years), QQQ annualized +13.09% vs +10.73% for VTWO. Past performance does not guarantee future results.
Which is riskier, QQQ or VTWO?
QQQ has been the more volatile fund at 30.6% annualized versus 19.1% for VTWO. Worst drawdown: QQQ -83.0% vs VTWO -42.4%.
Should I hold both QQQ and VTWO?
QQQ and VTWO have a monthly-return correlation of 0.74, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and VTWO?
QQQ and VTWO share 0 common holdings with a 0.0% weight overlap. Combined, they hold 2046 unique securities.
Which pays a higher dividend, QQQ or VTWO?
QQQ yields 0.41% while VTWO yields 1.39%, so VTWO currently pays the higher dividend yield.
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