Should I invest in VOO or QQQ?
QQQ - Performance Comparison. In the year-to-date period, VOO achieves a 3.62% return, which is significantly lower than QQQ's 4.62% return. Over the past 10 years, VOO has underperformed QQQ with an annualized return of 12.73%, while QQQ has yielded a comparatively higher 18.33% annualized return.
VOO will offer consistent returns with diversification and lower costs. QQQ will offer you the opportunity to bring in higher returns, but these come with more risks and a higher cost. If you're looking for the best return possible on your money, then you're going to want to go with QQQ.
QQQ - Performance Comparison. In the year-to-date period, VGT achieves a 4.37% return, which is significantly lower than QQQ's 4.76% return. Over the past 10 years, VGT has outperformed QQQ with an annualized return of 20.71%, while QQQ has yielded a comparatively lower 18.66% annualized return.
Compared to its peer group, the QQQ has a relatively low expense ratio of 0.2%, along with a fairly average yield of 0.62%. It also has a long history of outperforming several benchmarks. Over the prior 10 years, for instance, the QQQ has outperformed the S&P 500 by a staggering 186.2%.
The problems with Invesco QQQ Trust
The number one biggest problem with Invesco QQQ Trust is that a small number of stocks make up a large percentage of the fund. That's not the fund's fault, it is simply tracking the index. But you can't ignore this lack of diversification.
| ETF | Assets under management | Expense ratio |
|---|---|---|
| Invesco QQQ Trust (ticker: QQQ) | $244 billion | 0.2% |
| VanEck Semiconductor ETF (SMH) | $14 billion | 0.35% |
| Consumer Discretionary Select Sector SPDR Fund (XLY) | $19 billion | 0.09% |
| Global X Uranium ETF (URA) | $3 billion | 0.69% |
VOO VS QQQ: Sectors and Top Holdings
VOO provides broad exposure to various sectors, including technology, healthcare, financials, and consumer discretionary. In contrast, QQQ has a more concentrated focus on the technology sector, with top holdings such as Apple, Microsoft, and Amazon.
For investors seeking an alternative to QQQ's mega-cap exposure, the Invesco S&P 500 Top 50 ETF (XLG) is an excellent option.
For investors looking at a relatively safe way to invest in the stock market while also trying to maximize their returns, QQQ can make for an excellent investment to consider. In five years, the fund has more than doubled in value.
One of the bigger winners of 2023 has been the Invesco QQQ ETF (NASDAQ: QQQ), which mirrors the Nasdaq-100 index. The Nasdaq-100 tracks the 100 largest nonfinancial stocks trading on the Nasdaq stock exchange. Its popularity has made it the second-most traded ETF in the U.S., based on daily volume traded.
Is QQQ the best index fund?
Invesco QQQ Trust ETF (QQQ)
This ETF started trading in 1999, and it's managed by Invesco, a fund giant. This fund is the top-performing large-cap growth fund in terms of total return over the 15 years to September 2023, according to Lipper. Expense ratio: 0.20 percent.
With a significant focus on high-performing sectors like Technology, Consumer Discretionary, and Health Care, the Nasdaq-100 has managed to outshine the S&P 500 by a considerable margin from December 31, 2007, to September 30, 2023.
Overview. For the month of November, QQQ's NAV returned 10.79%, outperforming the S&P 500 Index which returned 9.13%. The Russell 1000 Growth Index outperformed QQQ which returned 10.90% while the Russell 1000 Value Index underperformed which returned 7.54%. QQQ's outperformance vs.
Because it passively follows the index, the QQQ share price goes up and down along with the tech-heavy Nasdaq 100. Passive management keeps fees low, and investors are rewarded with the full gains of the volatile index if it rises. But they also have to bear the Nasdaq 100's full losses when it falls.
Several short-term signals, along with a general good trend, are positive and we conclude that the current level may hold a buying opportunity as there is a fair chance for VOO ETF to perform well in the short-term.
Enter the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM). For 2024, the S&P 500 is forecast to deliver EPS growth of 11.7%, solidly above the 10-year average of 8.4%. QQQ and QQQM follow the Nasdaq-100 Index. That benchmark has a long history of delivering EPS growth well in excess of the S&P 500.
| Symbol | Name | AUM |
|---|---|---|
| SPY | SPDR S&P 500 ETF Trust | $485,555,000.00 |
| IVV | iShares Core S&P 500 ETF | $418,691,000.00 |
| VOO | Vanguard S&P 500 ETF | $389,241,000.00 |
| VTI | Vanguard Total Stock Market ETF | $356,570,000.00 |
- Vanguard Real Estate ETF (VNQ -2.1%) ...
- iShares Core S&P Total U.S. Stock Market ETF (ITOT -0.45%) ...
- Consumer Staples Select Sector SPDR Fund (XLP -0.62%) ...
- iShares 0-3 Month Treasury Bond ETF (SGOV 0.02%) ...
- Vanguard Utilities ETF (VPU -2.14%) ...
- iShares U.S. Healthcare Providers ETF (IHF -1.27%) ...
- Schwab U.S. TIPS ETF (SCHP -0.52%)
| ETF | Assets under management | Expense ratio |
|---|---|---|
| iShares Core S&P 500 ETF (ticker: IVV) | $378 billion | 0.03% |
| Vanguard Growth ETF (VUG) | $105 billion | 0.04% |
| Vanguard Information Technology ETF (VGT) | $60 billion | 0.10% |
| Schwab US Dividend Equity ETF (SCHD) | $52 billion | 0.06% |
QQQ and VOO Holdings Overlap
The VOO and QQQ portfolio contains matching assets. Of the 100 stocks included in the Nasdaq-100 index, 78 are also included in the S&P 500. First of all, these are companies with a large weight in the index, and therefore with maximum influence on its values.
What is the average return of VOO vs QQQ?
Over the past 10 years, VOO has underperformed QQQ with an annualized return of 13.04%, while QQQ has yielded a comparatively higher 18.66% annualized return. The chart below displays the growth of a $10,000 investment in both assets, with all prices adjusted for splits and dividends.
| 1 | AXA IM Nasdaq 100 UCITS ETF USD Acc | +42.51% |
|---|---|---|
| 2 | Invesco Nasdaq-100 Swap UCITS ETF Dist | +42.50% |
| 3 | Amundi Nasdaq-100 II UCITS ETF Acc | +42.47% |
It's expected to decline even further in 2024. This means that the erosion of real income will continue to slow down, which in turn can encourage consumer spending.
The good news is that some of the stocks market observers are most bullish on for 2024 are found in several familiar, cost-effective ETFs. Those include the Invesco QQQ Trust (QQQ) and Invesco NASDAQ 100 ETF (QQQM). The two Nasdaq-100 Index (NDX)-tracking ETFs have delivered stellar showings this year.
VOO - Performance Comparison. In the year-to-date period, QQQ achieves a 2.98% return, which is significantly higher than VOO's 1.72% return. Over the past 10 years, QQQ has outperformed VOO with an annualized return of 18.22%, while VOO has yielded a comparatively lower 12.58% annualized return.
