QQQ vs XLK
Invesco QQQ Trust, Series 1 vs State Street Technology Select Sector SPDR ETF
Quick Verdict
XLK has a lower expense ratio. XLK delivered stronger 1-year returns. QQQ offers more diversification with 108 holdings.
Side-by-Side Comparison
| Metric | QQQ | XLK | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.08% | |
| AUM | $496.3B | $124.4B | |
| Dividend Yield | 0.44% | 0.45% | |
| Holdings | 108 | 77 | |
| YTD Return | +15.47% | +25.08% | |
| 1Y Return | +24.44% | +38.25% | |
| 3Y Return (annualized) | +25.47% | +29.63% | |
| 5Y Return (annualized) | +14.22% | +18.87% | |
| Volatility (annualized) | 30.6% | 23.2% | |
| Max Drawdown | -83.0% | -82.0% | |
| Fund Family | Invesco (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Dec 16, 1998 |
QQQ vs XLK Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and State Street Technology Select Sector SPDR ETF (XLK) is a ETF from SPDR State Street Global Advisors. Over the past year QQQ returned +24.44% while XLK returned +38.25%. Year to date, QQQ is up 15.47% versus a gain of 25.08% for XLK.
Over three years, QQQ compounded at +25.47% per year against +29.63% for XLK; over five years the annualized figures are +14.22% and +18.87% respectively. Across the full 28-year window we track, QQQ has the edge at +12.99% annualized vs +9.30%. 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 23.2% for XLK. 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 -82.0% for XLK. 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 0.77. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
QQQ charges 0.18% per year while XLK 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 0.45% for XLK.
Holdings Overlap
QQQ and XLK share 36 holdings out of 141 unique holdings combined, representing a 56.0% weight overlap.
High overlap means holding both may not provide much additional diversification.
Frequently Asked Questions
Which is cheaper, QQQ or XLK?
QQQ has an expense ratio of 0.18% while XLK charges 0.08%. XLK is the cheaper option. On a $10,000 investment, that is $10 per year of difference.
Which performed better, QQQ or XLK?
Over the past year QQQ returned +24.44% vs +38.25% for XLK, so XLK leads on 1-year performance. Over the longest common window we track (28 years), QQQ annualized +12.99% vs +9.30% for XLK. Past performance does not guarantee future results.
Which is riskier, QQQ or XLK?
QQQ has been the more volatile fund at 30.6% annualized versus 23.2% for XLK. Worst drawdown: QQQ -83.0% vs XLK -82.0%.
Should I hold both QQQ and XLK?
QQQ and XLK have a monthly-return correlation of 0.77, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and XLK?
QQQ and XLK share 36 common holdings with a 56.0% weight overlap. Combined, they hold 141 unique securities.
Which pays a higher dividend, QQQ or XLK?
QQQ yields 0.44% while XLK yields 0.45%, so XLK currently pays the higher dividend yield.
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