PMO vs QQQ
PMO vs QQQ
Putnam Municipal Opportunities Trust vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. PMO offers more diversification with 110 holdings.
Side-by-Side Comparison
| Metric | PMO | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 1.02% | 0.18% | |
| AUM | $4,829 | $455.8B | |
| Dividend Yield | 4.04% | 0.41% | |
| Holdings | 288 | 108 | |
| YTD Return | +0.30% | +18.20% | |
| 1Y Return | +10.75% | +27.63% | |
| 3Y Return (annualized) | +5.92% | +25.54% | |
| 5Y Return (annualized) | -1.95% | +15.12% | |
| Volatility (annualized) | 11.5% | 30.6% | |
| Max Drawdown | -50.4% | -83.0% | |
| Fund Family | Putnam Investments | Invesco (US) | |
| Category | Tax Preferred | Equity | |
| Inception | May 28, 1993 | Mar 10, 1999 |
PMO vs QQQ Performance
Putnam Municipal Opportunities Trust (PMO) is a ETF from Putnam Investments and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year PMO returned +10.75% while QQQ returned +27.63%. Year to date, PMO is up 0.30% versus a gain of 18.20% for QQQ.
Over three years, PMO compounded at +5.92% per year against +25.54% for QQQ; over five years the annualized figures are -1.95% and +15.12% respectively. Across the full 27-year window we track, QQQ has the edge at +13.11% annualized vs -0.05%. 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 11.5% for PMO. 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 -50.4% for PMO 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 0.12. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
PMO charges 1.02% per year while QQQ charges 0.18%. On a $10,000 position that is $102 vs $18 annually, a gap of $84 per year that compounds over a long holding period. On income, PMO currently yields 4.04% against 0.41% for QQQ.
Holdings Overlap
PMO and QQQ share 0 holdings out of 213 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, PMO or QQQ?
PMO has an expense ratio of 1.02% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $84 per year of difference.
Which performed better, PMO or QQQ?
Over the past year PMO returned +10.75% vs +27.63% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (27 years), PMO annualized -0.05% vs +13.11% for QQQ. Past performance does not guarantee future results.
Which is riskier, PMO or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 11.5% for PMO. Worst drawdown: PMO -50.4% vs QQQ -83.0%.
Should I hold both PMO and QQQ?
PMO and QQQ have a monthly-return correlation of 0.12, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between PMO and QQQ?
PMO and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 213 unique securities.
Which pays a higher dividend, PMO or QQQ?
PMO yields 4.04% while QQQ yields 0.41%, so PMO currently pays the higher dividend yield.
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