FTSM vs QQQ
FTSM vs QQQ
First Trust Enhanced Short Maturity ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. FTSM offers more diversification with 391 holdings.
Side-by-Side Comparison
| Metric | FTSM | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.29% | 0.18% | |
| AUM | $6.5B | $455.8B | |
| Dividend Yield | 4.14% | 0.41% | |
| Holdings | 634 | 108 | |
| YTD Return | +1.72% | +17.27% | |
| 1Y Return | +3.54% | +28.64% | |
| 3Y Return (annualized) | +4.67% | +24.88% | |
| 5Y Return (annualized) | +3.52% | +14.86% | |
| Volatility (annualized) | 1.2% | 30.6% | |
| Max Drawdown | -5.4% | -83.0% | |
| Fund Family | First Trust Portfolios (US) | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Aug 5, 2014 | Mar 10, 1999 |
FTSM vs QQQ Performance
First Trust Enhanced Short Maturity ETF (FTSM) is a ETF from First Trust Portfolios (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year FTSM returned +3.54% while QQQ returned +28.64%. Year to date, FTSM is up 1.72% versus a gain of 17.27% for QQQ.
Over three years, FTSM compounded at +4.67% per year against +24.88% for QQQ; over five years the annualized figures are +3.52% and +14.86% respectively. Across the full 12-year window we track, QQQ has the edge at +13.08% annualized vs +1.46%. 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 1.2% for FTSM. 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 -5.4% for FTSM and -83.0% for QQQ. 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 0.19. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FTSM charges 0.29% per year while QQQ charges 0.18%. On a $10,000 position that is $29 vs $18 annually, a gap of $11 per year that compounds over a long holding period. On income, FTSM currently yields 4.14% against 0.41% for QQQ.
Holdings Overlap
FTSM and QQQ share 0 holdings out of 494 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FTSM or QQQ?
FTSM has an expense ratio of 0.29% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $11 per year of difference.
Which performed better, FTSM or QQQ?
Over the past year FTSM returned +3.54% vs +28.64% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (12 years), FTSM annualized +1.46% vs +13.08% for QQQ. Past performance does not guarantee future results.
Which is riskier, FTSM or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 1.2% for FTSM. Worst drawdown: FTSM -5.4% vs QQQ -83.0%.
Should I hold both FTSM and QQQ?
FTSM and QQQ have a monthly-return correlation of 0.19, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FTSM and QQQ?
FTSM and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 494 unique securities.
Which pays a higher dividend, FTSM or QQQ?
FTSM yields 4.14% while QQQ yields 0.41%, so FTSM currently pays the higher dividend yield.
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