QQQ vs VFH
QQQ vs VFH
Invesco QQQ Trust, Series 1 vs Vanguard Financials ETF
Quick Verdict
VFH has a lower expense ratio. QQQ delivered stronger 1-year returns. VFH offers more diversification with 412 holdings.
Side-by-Side Comparison
| Metric | QQQ | VFH | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.09% | |
| AUM | $455.8B | $12.7B | |
| Dividend Yield | 0.41% | 1.77% | |
| Holdings | 108 | 415 | |
| YTD Return | +18.34% | +6.84% | |
| 1Y Return | +28.94% | +13.83% | |
| 3Y Return (annualized) | +25.28% | +20.40% | |
| 5Y Return (annualized) | +15.22% | +11.69% | |
| Volatility (annualized) | 30.6% | 20.3% | |
| Max Drawdown | -83.0% | -79.9% | |
| Fund Family | Invesco (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Mar 10, 1999 | Jan 26, 2004 |
QQQ vs VFH Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and Vanguard Financials ETF (VFH) is a ETF from Vanguard (US). Over the past year QQQ returned +28.94% while VFH returned +13.83%. Year to date, QQQ is up 18.34% versus a gain of 6.84% for VFH.
Over three years, QQQ compounded at +25.28% per year against +20.40% for VFH; over five years the annualized figures are +15.22% and +11.69% respectively. Across the full 23-year window we track, QQQ has the edge at +13.12% annualized vs +5.27%. 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 20.3% for VFH. 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 -83.0% for QQQ and -79.9% for VFH. 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 0.66. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while VFH charges 0.09%. On a $10,000 position that is $18 vs $9 annually, a gap of $9 per year that compounds over a long holding period. On income, QQQ currently yields 0.41% against 1.77% for VFH.
Holdings Overlap
QQQ and VFH share 1 holdings out of 514 unique holdings combined, representing a 0.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in QQQ | Weight in VFH | Difference |
|---|---|---|---|
| PYPL | 0.19% | 0.31% | 0.12% |
Frequently Asked Questions
Which is cheaper, QQQ or VFH?
QQQ has an expense ratio of 0.18% while VFH charges 0.09%. VFH is the cheaper option. On a $10,000 investment, that is $9 per year of difference.
Which performed better, QQQ or VFH?
Over the past year QQQ returned +28.94% vs +13.83% for VFH, so QQQ leads on 1-year performance. Over the longest common window we track (23 years), QQQ annualized +13.12% vs +5.27% for VFH. Past performance does not guarantee future results.
Which is riskier, QQQ or VFH?
QQQ has been the more volatile fund at 30.6% annualized versus 20.3% for VFH. Worst drawdown: QQQ -83.0% vs VFH -79.9%.
Should I hold both QQQ and VFH?
QQQ and VFH have a monthly-return correlation of 0.66, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and VFH?
QQQ and VFH share 1 common holdings with a 0.2% weight overlap. Combined, they hold 514 unique securities.
Which pays a higher dividend, QQQ or VFH?
QQQ yields 0.41% while VFH yields 1.77%, so VFH currently pays the higher dividend yield.
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