QQQ vs. BIV: What’s The Difference?

The Invesco QQQ Trust (QQQ) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. QQQ is a Invesco Large Growth fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between QQQ and BIV? And which fund is better?

The expense ratio of QQQ is 0.15 percentage points higher than BIV’s (0.2% vs. 0.05%). QQQ also has a high exposure to the technology sector while BIV is mostly comprised of AAA bonds. Overall, QQQ has provided higher returns than BIV over the past ten years.

In this article, we’ll compare QQQ vs. BIV. We’ll look at portfolio growth and performance, as well as at their annual returns and industry exposure. Moreover, I’ll also discuss QQQ’s and BIV’s risk metrics, holdings, and fund composition and examine how these affect their overall returns.

Summary

QQQ BIV
Name Invesco QQQ Trust Vanguard Intermediate-Term Bond Index Fund ETF Shares
Category Large Growth Intermediate-Term Bond
Issuer Invesco Vanguard
AUM 174.51B 39.05B
Avg. Return 21.27% 5.31%
Div. Yield 0.49% 2.06%
Expense Ratio 0.2% 0.05%

The Invesco QQQ Trust (QQQ) is a Large Growth fund that is issued by Invesco. It currently has 174.51B total assets under management and has yielded an average annual return of 21.27% over the past 10 years. The fund has a dividend yield of 0.49% with an expense ratio of 0.2%.

The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.

QQQ’s dividend yield is 1.57% lower than that of BIV (0.49% vs. 2.06%). Also, QQQ yielded on average 15.96% more per year over the past decade (21.27% vs. 5.31%). The expense ratio of QQQ is 0.15 percentage points higher than BIV’s (0.2% vs. 0.05%).

Fund Composition

Holdings

QQQ - Holdings

QQQ Holdings Weight
Apple Inc 11.0%
Microsoft Corp 9.82%
Amazon.com Inc 8.35%
Facebook Inc Class A 4.01%
Facebook Inc A 4.01%
Alphabet Inc Class C 3.9%
Tesla Inc 3.9%
NVIDIA Corp 3.65%
Alphabet Inc Class A 3.53%
Alphabet Inc A 3.53%

QQQ’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Facebook Inc A at 11.0%, 9.82%, 8.35%, 4.01%, and 4.01%.

Alphabet Inc Class C (3.9%), Tesla Inc (3.9%), and NVIDIA Corp (3.65%) have a slightly smaller but still significant weight. Alphabet Inc Class A and Alphabet Inc A are also represented in the QQQ’s holdings at 3.53% and 3.53%.

BIV - Holdings

BIV Bond Sectors Weight
AAA 54.51%
BBB 25.24%
A 16.97%
AA 3.1%
Others 0.15%
Below B 0.03%
B 0.0%
BB 0.0%
US Government 0.0%

BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.

Performance

Annual Returns

QQQ vs. BIV - Annual Returns

Year QQQ BIV
2020 48.6% 9.71%
2019 39.12% 10.19%
2018 -0.14% -0.09%
2017 32.7% 3.8%
2016 7.01% 2.86%
2015 9.54% 1.23%
2014 19.12% 7.0%
2013 36.6% -3.44%
2012 18.09% 7.02%
2011 3.44% 10.62%
2010 19.89% 9.55%

QQQ had its best year in 2020 with an annual return of 48.6%. QQQ’s worst year over the past decade yielded -0.14% and occurred in 2018. In most years the Invesco QQQ Trust provided moderate returns such as in 2012, 2014, and 2010 where annual returns amounted to 18.09%, 19.12%, and 19.89% respectively.

The year 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.

Portfolio Growth

QQQ vs. BIV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
QQQ $10,000 $76,522 21.27%
BIV $10,000 $17,492 5.31%

A $10,000 investment in QQQ would have resulted in a final balance of $76,522. This is a profit of $66,522 over 11 years and amounts to a compound annual growth rate (CAGR) of 21.27%.

With a $10,000 investment in BIV, the end total would have been $17,492. This equates to a $7,492 profit over 11 years and a compound annual growth rate (CAGR) of 5.31%.

QQQ’s CAGR is 15.96 percentage points higher than that of BIV and as a result, would have yielded $59,030 more on a $10,000 investment. Thus, QQQ outperformed BIV by 15.96% annually.


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