MMU vs QQQ
MMU vs QQQ
Western Asset Managed Municipals Fund Inc. vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. MMU offers more diversification with 221 holdings.
Side-by-Side Comparison
| Metric | MMU | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 1.34% | 0.18% | |
| AUM | $587M | $455.8B | |
| Dividend Yield | 5.92% | 0.41% | |
| Holdings | 427 | 108 | |
| YTD Return | -0.50% | +14.45% | |
| 1Y Return | +7.64% | +24.70% | |
| 3Y Return (annualized) | +7.24% | +24.19% | |
| 5Y Return (annualized) | -0.74% | +14.49% | |
| Volatility (annualized) | 11.1% | 30.6% | |
| Max Drawdown | -41.0% | -83.0% | |
| Fund Family | Franklin Templeton Investments (US) | Invesco (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Jun 26, 1992 | Mar 10, 1999 |
MMU vs QQQ Performance
Western Asset Managed Municipals Fund Inc. (MMU) 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 MMU returned +7.64% while QQQ returned +24.70%. Year to date, MMU is down 0.50% versus a gain of 14.45% for QQQ.
Over three years, MMU compounded at +7.24% per year against +24.19% for QQQ; over five years the annualized figures are -0.74% and +14.49% respectively. Across the full 27-year window we track, QQQ has the edge at +12.98% annualized vs +0.28%. 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 11.1% for MMU. 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 -41.0% for MMU 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 0.13. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
MMU charges 1.34% per year while QQQ charges 0.18%. On a $10,000 position that is $134 vs $18 annually, a gap of $116 per year that compounds over a long holding period. On income, MMU currently yields 5.92% against 0.41% for QQQ.
Holdings Overlap
MMU and QQQ share 0 holdings out of 324 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, MMU or QQQ?
MMU has an expense ratio of 1.34% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $116 per year of difference.
Which performed better, MMU or QQQ?
Over the past year MMU returned +7.64% vs +24.70% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (27 years), MMU annualized +0.28% vs +12.98% for QQQ. Past performance does not guarantee future results.
Which is riskier, MMU or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 11.1% for MMU. Worst drawdown: MMU -41.0% vs QQQ -83.0%.
Should I hold both MMU and QQQ?
MMU and QQQ have a monthly-return correlation of 0.13, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MMU and QQQ?
MMU and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 324 unique securities.
Which pays a higher dividend, MMU or QQQ?
MMU yields 5.92% while QQQ yields 0.41%, so MMU currently pays the higher dividend yield.
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