QQQ vs VMBS
QQQ vs VMBS
Invesco QQQ Trust, Series 1 vs Vanguard Mortgage-Backed Securities ETF
Quick Verdict
VMBS has a lower expense ratio. QQQ delivered stronger 1-year returns. VMBS offers more diversification with 4688 holdings.
Side-by-Side Comparison
| Metric | QQQ | VMBS | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.03% | |
| AUM | $455.8B | $15.6B | |
| Dividend Yield | 0.41% | 4.15% | |
| Holdings | 108 | 5,043 | |
| YTD Return | +12.48% | +0.01% | |
| 1Y Return | +22.35% | +4.32% | |
| 3Y Return (annualized) | +22.30% | +4.53% | |
| 5Y Return (annualized) | +14.24% | +0.22% | |
| Volatility (annualized) | 30.6% | 4.2% | |
| Max Drawdown | -83.0% | -18.4% | |
| Fund Family | Invesco (US) | Vanguard (US) | |
| Category | Equity | Fixed Income | |
| Inception | Mar 10, 1999 | Nov 19, 2009 |
QQQ vs VMBS Performance
Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US) and Vanguard Mortgage-Backed Securities ETF (VMBS) is a ETF from Vanguard (US). Over the past year QQQ returned +22.35% while VMBS returned +4.32%. Year to date, QQQ is up 12.48% versus a gain of 0.01% for VMBS.
Over three years, QQQ compounded at +22.30% per year against +4.53% for VMBS; over five years the annualized figures are +14.24% and +0.22% respectively. Across the full 17-year window we track, QQQ has the edge at +12.91% annualized vs +0.49%. 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 4.2% for VMBS. 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 -18.4% for VMBS. 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 0.30. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
QQQ charges 0.18% per year while VMBS charges 0.03%. On a $10,000 position that is $18 vs $3 annually, a gap of $15 per year that compounds over a long holding period. On income, QQQ currently yields 0.41% against 4.15% for VMBS.
Holdings Overlap
QQQ and VMBS share 0 holdings out of 4791 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, QQQ or VMBS?
QQQ has an expense ratio of 0.18% while VMBS charges 0.03%. VMBS is the cheaper option. On a $10,000 investment, that is $15 per year of difference.
Which performed better, QQQ or VMBS?
Over the past year QQQ returned +22.35% vs +4.32% for VMBS, so QQQ leads on 1-year performance. Over the longest common window we track (17 years), QQQ annualized +12.91% vs +0.49% for VMBS. Past performance does not guarantee future results.
Which is riskier, QQQ or VMBS?
QQQ has been the more volatile fund at 30.6% annualized versus 4.2% for VMBS. Worst drawdown: QQQ -83.0% vs VMBS -18.4%.
Should I hold both QQQ and VMBS?
QQQ and VMBS have a monthly-return correlation of 0.30, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between QQQ and VMBS?
QQQ and VMBS share 0 common holdings with a 0.0% weight overlap. Combined, they hold 4791 unique securities.
Which pays a higher dividend, QQQ or VMBS?
QQQ yields 0.41% while VMBS yields 4.15%, so VMBS currently pays the higher dividend yield.
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