HYG vs QQQ
HYG vs QQQ
iShares iBoxx $ High Yield Corporate Bond ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. HYG offers more diversification with 1089 holdings.
Side-by-Side Comparison
| Metric | HYG | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.49% | 0.18% | |
| AUM | $15.9B | $455.8B | |
| Dividend Yield | 5.90% | 0.41% | |
| Holdings | 1,331 | 108 | |
| YTD Return | +1.48% | +12.48% | |
| 1Y Return | +4.84% | +22.35% | |
| 3Y Return (annualized) | +8.10% | +22.30% | |
| 5Y Return (annualized) | +3.67% | +14.24% | |
| Volatility (annualized) | 10.0% | 30.6% | |
| Max Drawdown | -41.9% | -83.0% | |
| Fund Family | iShares by BlackRock (US) | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Apr 4, 2007 | Mar 10, 1999 |
HYG vs QQQ Performance
iShares iBoxx $ High Yield Corporate Bond ETF (HYG) 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 HYG returned +4.84% while QQQ returned +22.35%. Year to date, HYG is up 1.48% versus a gain of 12.48% for QQQ.
Over three years, HYG compounded at +8.10% per year against +22.30% for QQQ; over five years the annualized figures are +3.67% and +14.24% respectively. Across the full 19-year window we track, QQQ has the edge at +12.91% annualized vs +0.11%. 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 10.0% for HYG. 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 -41.9% for HYG 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 0.67. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
HYG charges 0.49% per year while QQQ charges 0.18%. On a $10,000 position that is $49 vs $18 annually, a gap of $31 per year that compounds over a long holding period. On income, HYG currently yields 5.90% against 0.41% for QQQ.
Holdings Overlap
HYG and QQQ share 0 holdings out of 1192 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, HYG or QQQ?
HYG has an expense ratio of 0.49% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $31 per year of difference.
Which performed better, HYG or QQQ?
Over the past year HYG returned +4.84% vs +22.35% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (19 years), HYG annualized +0.11% vs +12.91% for QQQ. Past performance does not guarantee future results.
Which is riskier, HYG or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 10.0% for HYG. Worst drawdown: HYG -41.9% vs QQQ -83.0%.
Should I hold both HYG and QQQ?
HYG and QQQ have a monthly-return correlation of 0.67, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between HYG and QQQ?
HYG and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1192 unique securities.
Which pays a higher dividend, HYG or QQQ?
HYG yields 5.90% while QQQ yields 0.41%, so HYG currently pays the higher dividend yield.
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