QQQ vs XLP
Invesco QQQ Trust, Series 1 vs State Street Consumer Staples Select Sector SPDR ETF
Quick Verdict
XLP has a lower expense ratio. QQQ delivered stronger 1-year returns. QQQ offers more diversification with 108 holdings.
Side-by-Side Comparison
| Metric | QQQ | XLP | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.08% | |
| AUM | $496.3B | $14.9B | |
| Dividend Yield | 0.44% | 2.58% | |
| Holdings | 108 | 38 | |
| YTD Return | +16.23% | +11.21% | |
| 1Y Return | +26.23% | +5.37% | |
| 3Y Return (annualized) | +25.75% | +8.48% | |
| 5Y Return (annualized) | +14.78% | +6.00% | |
| Volatility (annualized) | 30.6% | 12.5% | |
| Max Drawdown | -83.0% | -37.8% | |
| Fund Family | Invesco (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Dec 16, 1998 |
QQQ vs XLP Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and State Street Consumer Staples Select Sector SPDR ETF (XLP) is a ETF from SPDR State Street Global Advisors. Over the past year QQQ returned +26.23% while XLP returned +5.37%. Year to date, QQQ is up 16.23% versus a gain of 11.21% for XLP.
Over three years, QQQ compounded at +25.75% per year against +8.48% for XLP; over five years the annualized figures are +14.78% and +6.00% respectively. Across the full 27-year window we track, QQQ has the edge at +13.02% annualized vs +4.86%. 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 12.5% for XLP. 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 -37.8% for XLP. 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 0.28. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while XLP 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 2.58% for XLP.
Holdings Overlap
QQQ and XLP share 7 holdings out of 130 unique holdings combined, representing a 6.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, QQQ or XLP?
QQQ has an expense ratio of 0.18% while XLP charges 0.08%. XLP is the cheaper option. On a $10,000 investment, that is $10 per year of difference.
Which performed better, QQQ or XLP?
Over the past year QQQ returned +26.23% vs +5.37% for XLP, so QQQ leads on 1-year performance. Over the longest common window we track (27 years), QQQ annualized +13.02% vs +4.86% for XLP. Past performance does not guarantee future results.
Which is riskier, QQQ or XLP?
QQQ has been the more volatile fund at 30.6% annualized versus 12.5% for XLP. Worst drawdown: QQQ -83.0% vs XLP -37.8%.
Should I hold both QQQ and XLP?
QQQ and XLP have a monthly-return correlation of 0.28, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and XLP?
QQQ and XLP share 7 common holdings with a 6.2% weight overlap. Combined, they hold 130 unique securities.
Which pays a higher dividend, QQQ or XLP?
QQQ yields 0.44% while XLP yields 2.58%, so XLP currently pays the higher dividend yield.
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