Compare and contrast key facts about Invesco QQQ (QQQ) and Vanguard Information Technology ETF (VGT).
QQQ and VGT are both exchange-traded funds (ETFs), meaning they are traded on stock exchanges and can be bought and sold throughout the day. QQQ is a passively managed fund by Invesco that tracks the performance of the NASDAQ-100 Index. It was launched on Mar 10, 1999. VGT is a passively managed fund by Vanguard that tracks the performance of the MSCI US Investable Market Information Technology 25/50 Index. It was launched on Jan 26, 2004. Both QQQ and VGT are passive ETFs, meaning that they are not actively managed but aim to replicate the performance of the underlying index as closely as possible.
Scroll down to visually compare performance, riskiness, drawdowns, and other indicators and decide which better suits your portfolio: QQQ or VGT.
VGT - Performance Comparison. In the year-to-date period, QQQ achieves a 18.60% return, which is significantly lower than VGT's 21.46% return. Over the past 10 years, QQQ has underperformed VGT with an annualized return of 18.99%, while VGT has yielded a comparatively higher 21.24% annualized return.
One key difference is that the Invesco QQQ Trust is made up exclusively of Nasdaq stocks, while the Vanguard Growth Fund also holds stocks that trade on the New York Stock Exchange. The chart below shows the top 10 holdings in each fund and their exposure.
Two of the most popular ETFs are VGT and QQQ. Both of these offer access to leading tech companies. The choice between VGT and QQQ hinges on an investor's risk tolerance and investment goals, with VGT favoring aggressive growth-oriented portfolios and QQQ catering to a more balanced approach.
The Invesco QQQ Trust, long synonymous with tech, had a phenomenal year. But a less-discussed tech ETF, the SPDR NYSE Technology ETF, outperformed it in 2023.
The QQQ ETF offers buy-and-hold investors low expenses and long-term growth potential with enough diversification to avoid the risks of betting on one company. On the downside, long-term investors in QQQ must deal with sector risk, possible overvaluation, and the absence of small caps.
If you're a buy-and-hold investor looking to put money to work in the Nasdaq 100, QQQM is likely the better choice. If you're more of a frequent trader, the additional liquidity offered by QQQ could make it more worthwhile even though it comes with a higher expense ratio.
In the past year, QQQ returned a total of 32.90%, which is significantly higher than VOO's 26.58% return. Over the past 10 years, QQQ has had annualized average returns of 19.01% , compared to 12.95% for VOO. These numbers are adjusted for stock splits and include dividends.
The better Vanguard ETF for their needs is likely VYM, which delivers a higher 2.9% 30-day SEC yield by targeting the FTSE High Dividend Yield Index. It also charges the same expense ratio as VIG does, at 0.06%.
VOO - Performance Comparison. In the year-to-date period, VGT achieves a 20.00% return, which is significantly higher than VOO's 14.60% return. Over the past 10 years, VGT has outperformed VOO with an annualized return of 21.08%, while VOO has yielded a comparatively lower 12.90% annualized return.
In the past year, QQQ returned a total of 32.90%, which is significantly higher than VOO's 26.58% return. Over the past 10 years, QQQ has had annualized average returns of 19.01% , compared to 12.95% for VOO. These numbers are adjusted for stock splits and include dividends.
Exchange-traded funds (ETFs) can be excellent passive income vehicles, especially when they are low-cost. Consider the Vanguard Russell 1000 Growth ETF (NASDAQ: VONG).
QQQ - Performance Comparison. In the year-to-date period, VUG achieves a 19.98% return, which is significantly higher than QQQ's 17.17% return. Over the past 10 years, VUG has underperformed QQQ with an annualized return of 15.49%, while QQQ has yielded a comparatively higher 18.90% annualized return.
VOO - Performance Comparison. In the year-to-date period, VGT achieves a 20.00% return, which is significantly higher than VOO's 14.60% return. Over the past 10 years, VGT has outperformed VOO with an annualized return of 21.08%, while VOO has yielded a comparatively lower 12.90% annualized return.
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