PAAA vs QQQ
PAAA vs QQQ
PGIM AAA CLO ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. QQQ offers more diversification with 103 holdings.
Side-by-Side Comparison
| Metric | PAAA | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.19% | 0.18% | |
| AUM | $11.2B | $455.8B | |
| Dividend Yield | 5.67% | 0.41% | |
| Holdings | 355 | 108 | |
| YTD Return | +2.70% | +12.48% | |
| 1Y Return | +5.00% | +22.35% | |
| 3Y Return (annualized) | +6.49% | +22.30% | |
| 5Y Return (annualized) | - | +14.24% | |
| Volatility (annualized) | 0.7% | 30.6% | |
| Max Drawdown | -1.0% | -83.0% | |
| Fund Family | PGIM Investments | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jul 19, 2023 | Mar 10, 1999 |
PAAA vs QQQ Performance
PGIM AAA CLO ETF (PAAA) is a ETF from PGIM Investments and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year PAAA returned +5.00% while QQQ returned +22.35%. Year to date, PAAA is up 2.70% versus a gain of 12.48% for QQQ.
Over three years, PAAA compounded at +6.49% per year against +22.30% for QQQ. Across the full 3-year window we track, QQQ has the edge at +12.91% annualized vs +6.48%. 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 0.7% for PAAA. 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 -1.0% for PAAA 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 0.49. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
PAAA charges 0.19% per year while QQQ charges 0.18%. On a $10,000 position that is $19 vs $18 annually, a gap of $1 per year that compounds over a long holding period. On income, PAAA currently yields 5.67% against 0.41% for QQQ.
Holdings Overlap
PAAA and QQQ share 0 holdings out of 171 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, PAAA or QQQ?
PAAA has an expense ratio of 0.19% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, PAAA or QQQ?
Over the past year PAAA returned +5.00% vs +22.35% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (3 years), PAAA annualized +6.48% vs +12.91% for QQQ. Past performance does not guarantee future results.
Which is riskier, PAAA or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 0.7% for PAAA. Worst drawdown: PAAA -1.0% vs QQQ -83.0%.
Should I hold both PAAA and QQQ?
PAAA and QQQ have a monthly-return correlation of 0.49, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between PAAA and QQQ?
PAAA and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 171 unique securities.
Which pays a higher dividend, PAAA or QQQ?
PAAA yields 5.67% while QQQ yields 0.41%, so PAAA currently pays the higher dividend yield.
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