QQQ vs XLY
Invesco QQQ Trust, Series 1 vs State Street Consumer Discretionary Select Sector SPDR ETF
Quick Verdict
XLY has a lower expense ratio. QQQ delivered stronger 1-year returns. QQQ offers more diversification with 108 holdings.
Side-by-Side Comparison
| Metric | QQQ | XLY | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.08% | |
| AUM | $496.3B | $23.5B | |
| Dividend Yield | 0.44% | 0.78% | |
| Holdings | 108 | 50 | |
| YTD Return | +16.64% | +0.12% | |
| 1Y Return | +27.27% | +5.15% | |
| 3Y Return (annualized) | +25.96% | +13.66% | |
| 5Y Return (annualized) | +14.54% | +6.46% | |
| Volatility (annualized) | 30.6% | 19.2% | |
| Max Drawdown | -83.0% | -60.1% | |
| Fund Family | Invesco (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Dec 16, 1998 |
QQQ vs XLY Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and State Street Consumer Discretionary Select Sector SPDR ETF (XLY) is a ETF from SPDR State Street Global Advisors. Over the past year QQQ returned +27.27% while XLY returned +5.15%. Year to date, QQQ is up 16.64% versus a gain of 0.12% for XLY.
Over three years, QQQ compounded at +25.96% per year against +13.66% for XLY; over five years the annualized figures are +14.54% and +6.46% respectively. Across the full 27-year window we track, QQQ has the edge at +13.03% annualized vs +8.56%. 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 19.2% for XLY. 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 -60.1% for XLY. 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 0.63. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while XLY 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 0.78% for XLY.
Holdings Overlap
QQQ and XLY share 9 holdings out of 141 unique holdings combined, representing a 10.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, QQQ or XLY?
QQQ has an expense ratio of 0.18% while XLY charges 0.08%. XLY is the cheaper option. On a $10,000 investment, that is $10 per year of difference.
Which performed better, QQQ or XLY?
Over the past year QQQ returned +27.27% vs +5.15% for XLY, so QQQ leads on 1-year performance. Over the longest common window we track (27 years), QQQ annualized +13.03% vs +8.56% for XLY. Past performance does not guarantee future results.
Which is riskier, QQQ or XLY?
QQQ has been the more volatile fund at 30.6% annualized versus 19.2% for XLY. Worst drawdown: QQQ -83.0% vs XLY -60.1%.
Should I hold both QQQ and XLY?
QQQ and XLY have a monthly-return correlation of 0.63, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and XLY?
QQQ and XLY share 9 common holdings with a 10.2% weight overlap. Combined, they hold 141 unique securities.
Which pays a higher dividend, QQQ or XLY?
QQQ yields 0.44% while XLY yields 0.78%, so XLY currently pays the higher dividend yield.
Popular ETF Comparisons
Get Full ETF Analytics
Access complete holdings data, overlap analysis, screener tools, and more with FundXLS.