QQQ vs XAR
Invesco QQQ Trust, Series 1 vs State Street SPDR S&P Aerospace & Defense ETF
Quick Verdict
QQQ has a lower expense ratio. XAR delivered stronger 1-year returns. QQQ offers more diversification with 108 holdings.
Side-by-Side Comparison
| Metric | QQQ | XAR | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.35% | |
| AUM | $496.3B | $6.6B | |
| Dividend Yield | 0.44% | 0.31% | |
| Holdings | 108 | 49 | |
| YTD Return | +16.23% | +8.61% | |
| 1Y Return | +26.23% | +28.60% | |
| 3Y Return (annualized) | +25.75% | +31.99% | |
| 5Y Return (annualized) | +14.78% | +18.40% | |
| Volatility (annualized) | 30.6% | 20.3% | |
| Max Drawdown | -83.0% | -46.7% | |
| Fund Family | Invesco (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Sep 28, 2011 |
QQQ vs XAR Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and State Street SPDR S&P Aerospace & Defense ETF (XAR) is a ETF from State Street Investment Management. Over the past year QQQ returned +26.23% while XAR returned +28.60%. Year to date, QQQ is up 16.23% versus a gain of 8.61% for XAR.
Over three years, QQQ compounded at +25.75% per year against +31.99% for XAR; over five years the annualized figures are +14.78% and +18.40% respectively. Across the full 15-year window we track, XAR has the edge at +17.55% annualized vs +13.02%. 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 20.3% for XAR. 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 -46.7% for XAR. 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 0.64. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while XAR charges 0.35%. On a $10,000 position that is $18 vs $35 annually, a gap of $17 per year that compounds over a long holding period. On income, QQQ currently yields 0.44% against 0.31% for XAR.
Holdings Overlap
Frequently Asked Questions
Which is cheaper, QQQ or XAR?
QQQ has an expense ratio of 0.18% while XAR charges 0.35%. QQQ is the cheaper option. On a $10,000 investment, that is $17 per year of difference.
Which performed better, QQQ or XAR?
Over the past year QQQ returned +26.23% vs +28.60% for XAR, so XAR leads on 1-year performance. Over the longest common window we track (15 years), QQQ annualized +13.02% vs +17.55% for XAR. Past performance does not guarantee future results.
Which is riskier, QQQ or XAR?
QQQ has been the more volatile fund at 30.6% annualized versus 20.3% for XAR. Worst drawdown: QQQ -83.0% vs XAR -46.7%.
Should I hold both QQQ and XAR?
QQQ and XAR have a monthly-return correlation of 0.64, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and XAR?
QQQ and XAR share 2 common holdings with a 0.4% weight overlap. Combined, they hold 148 unique securities.
Which pays a higher dividend, QQQ or XAR?
QQQ yields 0.44% while XAR yields 0.31%, so QQQ currently pays the higher dividend yield.
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