MBSD vs QQQ
MBSD vs QQQ
FlexShares Disciplined Duration MBS Index Fund vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. MBSD offers more diversification with 462 holdings.
Side-by-Side Comparison
| Metric | MBSD | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.20% | 0.18% | |
| AUM | $89M | $455.8B | |
| Dividend Yield | 4.19% | 0.41% | |
| Holdings | 482 | 108 | |
| YTD Return | +0.12% | +18.34% | |
| 1Y Return | +2.89% | +28.94% | |
| 3Y Return (annualized) | +4.37% | +25.28% | |
| 5Y Return (annualized) | +0.47% | +15.22% | |
| Volatility (annualized) | 3.5% | 30.6% | |
| Max Drawdown | -18.0% | -83.0% | |
| Fund Family | Flexshares Trust | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Sep 3, 2014 | Mar 10, 1999 |
MBSD vs QQQ Performance
FlexShares Disciplined Duration MBS Index Fund (MBSD) is a ETF from Flexshares Trust and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year MBSD returned +2.89% while QQQ returned +28.94%. Year to date, MBSD is up 0.12% versus a gain of 18.34% for QQQ.
Over three years, MBSD compounded at +4.37% per year against +25.28% for QQQ; over five years the annualized figures are +0.47% and +15.22% respectively. Across the full 12-year window we track, QQQ has the edge at +13.12% annualized vs -0.09%. 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 3.5% for MBSD. 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 -18.0% for MBSD 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 0.41. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
MBSD charges 0.20% per year while QQQ charges 0.18%. On a $10,000 position that is $20 vs $18 annually, a gap of $2 per year that compounds over a long holding period. On income, MBSD currently yields 4.19% against 0.41% for QQQ.
Holdings Overlap
MBSD and QQQ share 0 holdings out of 565 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, MBSD or QQQ?
MBSD has an expense ratio of 0.20% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $2 per year of difference.
Which performed better, MBSD or QQQ?
Over the past year MBSD returned +2.89% vs +28.94% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (12 years), MBSD annualized -0.09% vs +13.12% for QQQ. Past performance does not guarantee future results.
Which is riskier, MBSD or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 3.5% for MBSD. Worst drawdown: MBSD -18.0% vs QQQ -83.0%.
Should I hold both MBSD and QQQ?
MBSD and QQQ have a monthly-return correlation of 0.41, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MBSD and QQQ?
MBSD and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 565 unique securities.
Which pays a higher dividend, MBSD or QQQ?
MBSD yields 4.19% while QQQ yields 0.41%, so MBSD currently pays the higher dividend yield.
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