QQQ vs XHB
Invesco QQQ Trust, Series 1 vs State Street SPDR S&P Homebuilders ETF
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. QQQ offers more diversification with 108 holdings.
Side-by-Side Comparison
| Metric | QQQ | XHB | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.35% | |
| AUM | $496.3B | $1.5B | |
| Dividend Yield | 0.44% | 0.55% | |
| Holdings | 108 | 36 | |
| YTD Return | +19.52% | +4.66% | |
| 1Y Return | +26.68% | -3.43% | |
| 3Y Return (annualized) | +26.64% | +10.05% | |
| 5Y Return (annualized) | +15.36% | +7.78% | |
| Volatility (annualized) | 30.6% | 28.1% | |
| Max Drawdown | -83.0% | -82.3% | |
| Fund Family | Invesco (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Jan 31, 2006 |
QQQ vs XHB Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and State Street SPDR S&P Homebuilders ETF (XHB) is a ETF from State Street Investment Management. Over the past year QQQ returned +26.68% while XHB returned -3.43%. Year to date, QQQ is up 19.52% versus a gain of 4.66% for XHB.
Over three years, QQQ compounded at +26.64% per year against +10.05% for XHB; over five years the annualized figures are +15.36% and +7.78% respectively. Across the full 21-year window we track, QQQ has the edge at +13.14% annualized vs +4.62%. 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 28.1% for XHB. 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 -82.3% for XHB. 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 0.63. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while XHB 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 0.55% for XHB.
Holdings Overlap
QQQ and XHB share 0 holdings out of 136 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 XHB?
QQQ has an expense ratio of 0.18% while XHB 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 XHB?
Over the past year QQQ returned +26.68% vs -3.43% for XHB, so QQQ leads on 1-year performance. Over the longest common window we track (21 years), QQQ annualized +13.14% vs +4.62% for XHB. Past performance does not guarantee future results.
Which is riskier, QQQ or XHB?
QQQ has been the more volatile fund at 30.6% annualized versus 28.1% for XHB. Worst drawdown: QQQ -83.0% vs XHB -82.3%.
Should I hold both QQQ and XHB?
QQQ and XHB have a monthly-return correlation of 0.63, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and XHB?
QQQ and XHB share 0 common holdings with a 0.0% weight overlap. Combined, they hold 136 unique securities.
Which pays a higher dividend, QQQ or XHB?
QQQ yields 0.44% while XHB yields 0.55%, so XHB currently pays the higher dividend yield.
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