QQQ vs XLF
Invesco QQQ Trust, Series 1 vs State Street Financial Select Sector SPDR ETF
Quick Verdict
XLF has a lower expense ratio. QQQ delivered stronger 1-year returns. QQQ offers more diversification with 108 holdings.
Side-by-Side Comparison
| Metric | QQQ | XLF | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.08% | |
| AUM | $496.3B | $58.6B | |
| Dividend Yield | 0.44% | 1.42% | |
| Holdings | 108 | 80 | |
| YTD Return | +16.23% | +4.58% | |
| 1Y Return | +26.23% | +9.39% | |
| 3Y Return (annualized) | +25.75% | +20.74% | |
| 5Y Return (annualized) | +14.78% | +10.51% | |
| Volatility (annualized) | 30.6% | 21.4% | |
| Max Drawdown | -83.0% | -83.8% | |
| Fund Family | Invesco (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Dec 16, 1998 |
QQQ vs XLF Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and State Street Financial Select Sector SPDR ETF (XLF) is a ETF from SPDR State Street Global Advisors. Over the past year QQQ returned +26.23% while XLF returned +9.39%. Year to date, QQQ is up 16.23% versus a gain of 4.58% for XLF.
Over three years, QQQ compounded at +25.75% per year against +20.74% for XLF; over five years the annualized figures are +14.78% and +10.51% respectively. Across the full 27-year window we track, QQQ has the edge at +13.02% annualized vs +3.64%. 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 21.4% for XLF. 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 -83.8% for XLF. 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 0.49. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while XLF charges 0.08%. On a $10,000 position that is $18 vs $8 annually, a gap of $10 per year that compounds over a long holding period. On income, QQQ currently yields 0.44% against 1.42% for XLF.
Holdings Overlap
QQQ and XLF share 1 holdings out of 178 unique holdings combined, representing a 0.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in QQQ | Weight in XLF | Difference |
|---|---|---|---|
| PYPL | 0.22% | 0.50% | 0.28% |
Frequently Asked Questions
Which is cheaper, QQQ or XLF?
QQQ has an expense ratio of 0.18% while XLF charges 0.08%. XLF is the cheaper option. On a $10,000 investment, that is $10 per year of difference.
Which performed better, QQQ or XLF?
Over the past year QQQ returned +26.23% vs +9.39% for XLF, so QQQ leads on 1-year performance. Over the longest common window we track (27 years), QQQ annualized +13.02% vs +3.64% for XLF. Past performance does not guarantee future results.
Which is riskier, QQQ or XLF?
QQQ has been the more volatile fund at 30.6% annualized versus 21.4% for XLF. Worst drawdown: QQQ -83.0% vs XLF -83.8%.
Should I hold both QQQ and XLF?
QQQ and XLF have a monthly-return correlation of 0.49, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and XLF?
QQQ and XLF share 1 common holdings with a 0.2% weight overlap. Combined, they hold 178 unique securities.
Which pays a higher dividend, QQQ or XLF?
QQQ yields 0.44% while XLF yields 1.42%, so XLF currently pays the higher dividend yield.
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