QQQ vs XHE
Invesco QQQ Trust, Series 1 vs State Street SPDR S&P Health Care Equipment 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 | XHE | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.35% | |
| AUM | $496.3B | $177M | |
| Dividend Yield | 0.44% | 0.06% | |
| Holdings | 108 | 70 | |
| YTD Return | +16.64% | +10.49% | |
| 1Y Return | +27.27% | +19.91% | |
| 3Y Return (annualized) | +25.96% | +4.03% | |
| 5Y Return (annualized) | +14.54% | -5.15% | |
| Volatility (annualized) | 30.6% | 18.9% | |
| Max Drawdown | -83.0% | -49.9% | |
| Fund Family | Invesco (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Jan 26, 2011 |
QQQ vs XHE Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and State Street SPDR S&P Health Care Equipment ETF (XHE) is a ETF from State Street Investment Management. Over the past year QQQ returned +27.27% while XHE returned +19.91%. Year to date, QQQ is up 16.64% versus a gain of 10.49% for XHE.
Over three years, QQQ compounded at +25.96% per year against +4.03% for XHE; over five years the annualized figures are +14.54% and -5.15% respectively. Across the full 16-year window we track, QQQ has the edge at +13.03% annualized vs +9.96%. 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 18.9% for XHE. 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 -49.9% for XHE. 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 0.62. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while XHE 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 0.06% for XHE.
Holdings Overlap
QQQ and XHE share 4 holdings out of 167 unique holdings combined, representing a 1.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, QQQ or XHE?
QQQ has an expense ratio of 0.18% while XHE 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 XHE?
Over the past year QQQ returned +27.27% vs +19.91% for XHE, so QQQ leads on 1-year performance. Over the longest common window we track (16 years), QQQ annualized +13.03% vs +9.96% for XHE. Past performance does not guarantee future results.
Which is riskier, QQQ or XHE?
QQQ has been the more volatile fund at 30.6% annualized versus 18.9% for XHE. Worst drawdown: QQQ -83.0% vs XHE -49.9%.
Should I hold both QQQ and XHE?
QQQ and XHE have a monthly-return correlation of 0.62, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and XHE?
QQQ and XHE share 4 common holdings with a 1.1% weight overlap. Combined, they hold 167 unique securities.
Which pays a higher dividend, QQQ or XHE?
QQQ yields 0.44% while XHE yields 0.06%, so QQQ currently pays the higher dividend yield.
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