HIO vs QQQ
HIO vs QQQ
Western Asset High Income Opportunity Fund Inc. vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. HIO offers more diversification with 213 holdings.
Side-by-Side Comparison
| Metric | HIO | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.94% | 0.18% | |
| AUM | $365M | $455.8B | |
| Dividend Yield | 10.92% | 0.41% | |
| Holdings | 338 | 108 | |
| YTD Return | +2.96% | +18.34% | |
| 1Y Return | +0.22% | +28.94% | |
| 3Y Return (annualized) | +8.77% | +25.28% | |
| 5Y Return (annualized) | +2.32% | +15.22% | |
| Volatility (annualized) | 13.4% | 30.6% | |
| Max Drawdown | -76.3% | -83.0% | |
| Fund Family | Franklin Templeton Investments (US) | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Oct 22, 1993 | Mar 10, 1999 |
HIO vs QQQ Performance
Western Asset High Income Opportunity Fund Inc. (HIO) is a ETF from Franklin Templeton Investments (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year HIO returned +0.22% while QQQ returned +28.94%. Year to date, HIO is up 2.96% versus a gain of 18.34% for QQQ.
Over three years, HIO compounded at +8.77% per year against +25.28% for QQQ; over five years the annualized figures are +2.32% and +15.22% respectively. Across the full 27-year window we track, QQQ has the edge at +13.12% annualized vs -2.04%. 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 13.4% for HIO. 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 -76.3% for HIO 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 0.34. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
HIO charges 0.94% per year while QQQ charges 0.18%. On a $10,000 position that is $94 vs $18 annually, a gap of $76 per year that compounds over a long holding period. On income, HIO currently yields 10.92% against 0.41% for QQQ.
Holdings Overlap
HIO and QQQ share 0 holdings out of 316 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, HIO or QQQ?
HIO has an expense ratio of 0.94% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $76 per year of difference.
Which performed better, HIO or QQQ?
Over the past year HIO returned +0.22% vs +28.94% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (27 years), HIO annualized -2.04% vs +13.12% for QQQ. Past performance does not guarantee future results.
Which is riskier, HIO or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 13.4% for HIO. Worst drawdown: HIO -76.3% vs QQQ -83.0%.
Should I hold both HIO and QQQ?
HIO and QQQ have a monthly-return correlation of 0.34, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between HIO and QQQ?
HIO and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 316 unique securities.
Which pays a higher dividend, HIO or QQQ?
HIO yields 10.92% while QQQ yields 0.41%, so HIO currently pays the higher dividend yield.
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