QQQ vs XBI
Invesco QQQ Trust, Series 1 vs State Street SPDR S&P Biotech ETF
Quick Verdict
QQQ has a lower expense ratio. XBI delivered stronger 1-year returns. XBI offers more diversification with 157 holdings.
Side-by-Side Comparison
| Metric | QQQ | XBI | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.35% | |
| AUM | $496.3B | $10.6B | |
| Dividend Yield | 0.44% | 0.39% | |
| Holdings | 108 | 157 | |
| YTD Return | +19.52% | +29.66% | |
| 1Y Return | +26.68% | +76.54% | |
| 3Y Return (annualized) | +26.64% | +25.68% | |
| 5Y Return (annualized) | +15.36% | +5.40% | |
| Volatility (annualized) | 30.6% | 26.9% | |
| Max Drawdown | -83.0% | -63.9% | |
| Fund Family | Invesco (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Jan 31, 2006 |
QQQ vs XBI Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and State Street SPDR S&P Biotech ETF (XBI) is a ETF from State Street Investment Management. Over the past year QQQ returned +26.68% while XBI returned +76.54%. Year to date, QQQ is up 19.52% versus a gain of 29.66% for XBI.
Over three years, QQQ compounded at +26.64% per year against +25.68% for XBI; over five years the annualized figures are +15.36% and +5.40% respectively. Across the full 21-year window we track, QQQ has the edge at +13.14% annualized vs +11.68%. 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 26.9% for XBI. 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 -63.9% for XBI. 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 0.57. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while XBI 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 0.39% for XBI.
Holdings Overlap
QQQ and XBI share 5 holdings out of 250 unique holdings combined, representing a 2.7% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, QQQ or XBI?
QQQ has an expense ratio of 0.18% while XBI 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 XBI?
Over the past year QQQ returned +26.68% vs +76.54% for XBI, so XBI leads on 1-year performance. Over the longest common window we track (21 years), QQQ annualized +13.14% vs +11.68% for XBI. Past performance does not guarantee future results.
Which is riskier, QQQ or XBI?
QQQ has been the more volatile fund at 30.6% annualized versus 26.9% for XBI. Worst drawdown: QQQ -83.0% vs XBI -63.9%.
Should I hold both QQQ and XBI?
QQQ and XBI have a monthly-return correlation of 0.57, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and XBI?
QQQ and XBI share 5 common holdings with a 2.7% weight overlap. Combined, they hold 250 unique securities.
Which pays a higher dividend, QQQ or XBI?
QQQ yields 0.44% while XBI yields 0.39%, so QQQ currently pays the higher dividend yield.
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