Compare and contrast key facts about Invesco QQQ (QQQ) and Vanguard Information Technology ETF (VGT).
QQQ and VGT are both exchange-traded funds (ETFs), meaning they are traded on stock exchanges and can be bought and sold throughout the day. QQQ is a passively managed fund by Invesco that tracks the performance of the NASDAQ-100 Index. It was launched on Mar 10, 1999. VGT is a passively managed fund by Vanguard that tracks the performance of the MSCI US Investable Market Information Technology 25/50 Index. It was launched on Jan 26, 2004. Both QQQ and VGT are passive ETFs, meaning that they are not actively managed but aim to replicate the performance of the underlying index as closely as possible.
Scroll down to visually compare performance, riskiness, drawdowns, and other indicators and decide which better suits your portfolio: QQQ or VGT.
VGT - Performance Comparison. In the year-to-date period, QQQ achieves a 17.64% return, which is significantly lower than VGT's 19.38% return. Over the past 10 years, QQQ has underperformed VGT with an annualized return of 18.76%, while VGT has yielded a comparatively higher 20.94% annualized return.
And the QQQ is cheap, only charging 0.2%. There's an even cheaper version, the Invesco Nasdaq 100 ETF (QQQM), which charges just 0.15%. Compare that to the 0.75% charged by ARK Innovation (ARKK). And ARK Innovation gained just 2.6% annually in the past 10 years.
The Vanguard Growth Fund has an expense ratio of just 0.04% and offers a dividend yield of 0.62%. The Invesco QQQ Trust, meanwhile, is more expensive with an expense ratio of 0.20%, and it pays an identical dividend yield of 0.62%.
In the past year, QQQ returned a total of 34.99%, which is slightly lower than VGT's 36.13% return. Over the past 10 years, QQQ has had annualized average returns of 18.75% , compared to 20.91% for VGT. These numbers are adjusted for stock splits and include dividends.
VOO - Performance Comparison. In the year-to-date period, VGT achieves a 19.14% return, which is significantly higher than VOO's 15.41% return. Over the past 10 years, VGT has outperformed VOO with an annualized return of 20.93%, while VOO has yielded a comparatively lower 12.88% annualized return.
Bloomberg recently reported that only one equity mutual fund, the Baron Partners Fund, has outperformed QQQ over the past 5, 10, and 15 years, mainly due to its outsized exposure to Tesla.
QQQM will provide identical exposure as QQQ at a lower fee, owning Amazon.com, Apple, Microsoft and other large-cap growth stocks. Invesco QQQ Trust's (QQQ) asset growth has accelerated in the last few years.
One of the few differences between these two funds is their expense ratio. The newer QQQM has a lower expense ratio by 0.05%. QQQM has an expense ratio of 0.15% compared to QQQ expense ratio of 0.20%. QQQM is a better option if you want to pay the lowest fees possible since its expense ratio is 25% smaller than QQQ.
In the past year, QQQ returned a total of 35.23%, which is significantly higher than VOO's 28.33% return. Over the past 10 years, QQQ has had annualized average returns of 18.77% , compared to 12.87% for VOO. These numbers are adjusted for stock splits and include dividends.
The better Vanguard ETF for their needs is likely VYM, which delivers a higher 2.9% 30-day SEC yield by targeting the FTSE High Dividend Yield Index. It also charges the same expense ratio as VIG does, at 0.06%.
QQQ - Volatility Comparison. Vanguard Information Technology ETF (VGT) has a higher volatility of 5.05% compared to Invesco QQQ (QQQ) at 3.37%. This indicates that VGT's price experiences larger fluctuations and is considered to be riskier than QQQ based on this measure.
In the past year, QQQ returned a total of 35.23%, which is significantly higher than VOO's 28.33% return. Over the past 10 years, QQQ has had annualized average returns of 18.77% , compared to 12.87% for VOO. These numbers are adjusted for stock splits and include dividends.
QQQ - Performance Comparison. In the year-to-date period, VUG achieves a 20.74% return, which is significantly higher than QQQ's 17.40% return. Over the past 10 years, VUG has underperformed QQQ with an annualized return of 15.41%, while QQQ has yielded a comparatively higher 18.74% annualized return.
Over the past 10 years, VGT has outperformed VTI with an annualized return of 20.76%, while VTI has yielded a comparatively lower 12.11% annualized return. The chart below displays the growth of a $10,000 investment in both assets, with all prices adjusted for splits and dividends.
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