QQQ vs XSW
Invesco QQQ Trust, Series 1 vs State Street SPDR S&P Software & Services ETF
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. XSW offers more diversification with 134 holdings.
Side-by-Side Comparison
| Metric | QQQ | XSW | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.35% | |
| AUM | $496.3B | $516M | |
| Dividend Yield | 0.44% | 0.00% | |
| Holdings | 108 | 134 | |
| YTD Return | +16.64% | +9.83% | |
| 1Y Return | +27.27% | +10.83% | |
| 3Y Return (annualized) | +25.96% | +16.16% | |
| 5Y Return (annualized) | +14.54% | +3.25% | |
| Volatility (annualized) | 30.6% | 20.8% | |
| Max Drawdown | -83.0% | -45.4% | |
| Fund Family | Invesco (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Sep 28, 2011 |
QQQ vs XSW Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and State Street SPDR S&P Software & Services ETF (XSW) is a ETF from State Street Investment Management. Over the past year QQQ returned +27.27% while XSW returned +10.83%. Year to date, QQQ is up 16.64% versus a gain of 9.83% for XSW.
Over three years, QQQ compounded at +25.96% per year against +16.16% for XSW; over five years the annualized figures are +14.54% and +3.25% respectively. Across the full 15-year window we track, XSW has the edge at +15.85% annualized vs +13.03%. 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 20.8% for XSW. 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 -45.4% for XSW. 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 0.80. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
QQQ charges 0.18% per year while XSW charges 0.35%. On a $10,000 position that is $18 vs $35 annually, a gap of $17 per year that compounds over a long holding period. On income, QQQ currently yields 0.44% against 0.00% for XSW.
Holdings Overlap
QQQ and XSW share 16 holdings out of 218 unique holdings combined, representing a 7.4% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, QQQ or XSW?
QQQ has an expense ratio of 0.18% while XSW charges 0.35%. QQQ is the cheaper option. On a $10,000 investment, that is $17 per year of difference.
Which performed better, QQQ or XSW?
Over the past year QQQ returned +27.27% vs +10.83% for XSW, so QQQ leads on 1-year performance. Over the longest common window we track (15 years), QQQ annualized +13.03% vs +15.85% for XSW. Past performance does not guarantee future results.
Which is riskier, QQQ or XSW?
QQQ has been the more volatile fund at 30.6% annualized versus 20.8% for XSW. Worst drawdown: QQQ -83.0% vs XSW -45.4%.
Should I hold both QQQ and XSW?
QQQ and XSW have a monthly-return correlation of 0.80, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and XSW?
QQQ and XSW share 16 common holdings with a 7.4% weight overlap. Combined, they hold 218 unique securities.
Which pays a higher dividend, QQQ or XSW?
QQQ yields 0.44% while XSW yields 0.00%, so QQQ currently pays the higher dividend yield.
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