QQQ vs XLSR
Invesco QQQ Trust, Series 1 vs State Street US Sector Rotation 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 | XLSR | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.70% | |
| AUM | $496.3B | $1.1B | |
| Dividend Yield | 0.44% | 0.46% | |
| Holdings | 108 | 21 | |
| YTD Return | +16.64% | +6.23% | |
| 1Y Return | +27.27% | +17.55% | |
| 3Y Return (annualized) | +25.96% | +16.74% | |
| 5Y Return (annualized) | +14.54% | +9.00% | |
| Volatility (annualized) | 30.6% | 16.3% | |
| Max Drawdown | -83.0% | -32.9% | |
| Fund Family | Invesco (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Apr 2, 2019 |
QQQ vs XLSR Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and State Street US Sector Rotation ETF (XLSR) is a ETF from State Street Investment Management. Over the past year QQQ returned +27.27% while XLSR returned +17.55%. Year to date, QQQ is up 16.64% versus a gain of 6.23% for XLSR.
Over three years, QQQ compounded at +25.96% per year against +16.74% for XLSR; over five years the annualized figures are +14.54% and +9.00% respectively. Across the full 7-year window we track, QQQ has the edge at +13.03% annualized vs +12.36%. 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 16.3% for XLSR. 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 -32.9% for XLSR. 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 0.90. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
QQQ charges 0.18% per year while XLSR charges 0.70%. On a $10,000 position that is $18 vs $70 annually, a gap of $52 per year that compounds over a long holding period. On income, QQQ currently yields 0.44% against 0.46% for XLSR.
Holdings Overlap
QQQ and XLSR share 17 holdings out of 119 unique holdings combined, representing a 24.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, QQQ or XLSR?
QQQ has an expense ratio of 0.18% while XLSR charges 0.70%. QQQ is the cheaper option. On a $10,000 investment, that is $52 per year of difference.
Which performed better, QQQ or XLSR?
Over the past year QQQ returned +27.27% vs +17.55% for XLSR, so QQQ leads on 1-year performance. Over the longest common window we track (7 years), QQQ annualized +13.03% vs +12.36% for XLSR. Past performance does not guarantee future results.
Which is riskier, QQQ or XLSR?
QQQ has been the more volatile fund at 30.6% annualized versus 16.3% for XLSR. Worst drawdown: QQQ -83.0% vs XLSR -32.9%.
Should I hold both QQQ and XLSR?
QQQ and XLSR have a monthly-return correlation of 0.90, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between QQQ and XLSR?
QQQ and XLSR share 17 common holdings with a 24.3% weight overlap. Combined, they hold 119 unique securities.
Which pays a higher dividend, QQQ or XLSR?
QQQ yields 0.44% while XLSR yields 0.46%, so XLSR currently pays the higher dividend yield.
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