HEFA vs QQQ
HEFA vs QQQ
iShares Currency Hedged MSCI EAFE ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. HEFA offers more diversification with 648 holdings.
Side-by-Side Comparison
| Metric | HEFA | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.35% | 0.18% | |
| AUM | $7.5B | $455.8B | |
| Dividend Yield | 2.95% | 0.41% | |
| Holdings | 786 | 108 | |
| YTD Return | +12.63% | +18.34% | |
| 1Y Return | +25.13% | +28.94% | |
| 3Y Return (annualized) | +18.20% | +25.28% | |
| 5Y Return (annualized) | +11.50% | +15.22% | |
| Volatility (annualized) | 12.3% | 30.6% | |
| Max Drawdown | -45.6% | -83.0% | |
| Fund Family | iShares by BlackRock (US) | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Jan 31, 2014 | Mar 10, 1999 |
HEFA vs QQQ Performance
iShares Currency Hedged MSCI EAFE ETF (HEFA) is a ETF from iShares by BlackRock (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year HEFA returned +25.13% while QQQ returned +28.94%. Year to date, HEFA is up 12.63% versus a gain of 18.34% for QQQ.
Over three years, HEFA compounded at +18.20% per year against +25.28% for QQQ; over five years the annualized figures are +11.50% and +15.22% respectively. Across the full 13-year window we track, QQQ has the edge at +13.12% annualized vs +9.71%. 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 12.3% for HEFA. 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 -45.6% for HEFA 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 0.72. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
HEFA charges 0.35% per year while QQQ charges 0.18%. On a $10,000 position that is $35 vs $18 annually, a gap of $17 per year that compounds over a long holding period. On income, HEFA currently yields 2.95% against 0.41% for QQQ.
Holdings Overlap
HEFA and QQQ share 0 holdings out of 751 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, HEFA or QQQ?
HEFA has an expense ratio of 0.35% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $17 per year of difference.
Which performed better, HEFA or QQQ?
Over the past year HEFA returned +25.13% vs +28.94% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (13 years), HEFA annualized +9.71% vs +13.12% for QQQ. Past performance does not guarantee future results.
Which is riskier, HEFA or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 12.3% for HEFA. Worst drawdown: HEFA -45.6% vs QQQ -83.0%.
Should I hold both HEFA and QQQ?
HEFA and QQQ have a monthly-return correlation of 0.72, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between HEFA and QQQ?
HEFA and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 751 unique securities.
Which pays a higher dividend, HEFA or QQQ?
HEFA yields 2.95% while QQQ yields 0.41%, so HEFA currently pays the higher dividend yield.
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