The Invesco QQQ Trust (QQQ) and the Vanguard Total International Bond Index Fund ETF Shares (BNDX) are both among the Top 100 ETFs. QQQ is a Invesco Large Growth fund and BNDX is a Vanguard N/A fund. So, what’s the difference between QQQ and BNDX? And which fund is better?

The expense ratio of QQQ is 0.12 percentage points higher than BNDX’s (0.2% vs. 0.08%). QQQ also has a high exposure to the technology sector while BNDX is mostly comprised of A bonds. Overall, QQQ has provided higher returns than BNDX over the past ten years.

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

Summary

QQQBNDX
NameInvesco QQQ TrustVanguard Total International Bond Index Fund ETF Shares
CategoryLarge GrowthN/A
IssuerInvescoVanguard
AUM174.51B116.41B
Avg. Return21.27%4.63%
Div. Yield0.49%0.94%
Expense Ratio0.2%0.08%

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 Total International Bond Index Fund ETF Shares (BNDX) is a N/A fund that is issued by Vanguard. It currently has 116.41B total assets under management and has yielded an average annual return of 4.63% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.08%.

QQQ’s dividend yield is 0.45% lower than that of BNDX (0.49% vs. 0.94%). Also, QQQ yielded on average 16.64% more per year over the past decade (21.27% vs. 4.63%). The expense ratio of QQQ is 0.12 percentage points higher than BNDX’s (0.2% vs. 0.08%).

Fund Composition

Holdings

QQQ - Holdings

QQQ HoldingsWeight
Apple Inc11.0%
Microsoft Corp9.82%
Amazon.com Inc8.35%
Facebook Inc Class A4.01%
Facebook Inc A4.01%
Alphabet Inc Class C3.9%
Tesla Inc3.9%
NVIDIA Corp3.65%
Alphabet Inc Class A3.53%
Alphabet Inc A3.53%

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%.

BNDX - Holdings

BNDX Bond SectorsWeight
A29.19%
AA26.79%
AAA21.59%
BBB19.41%
Others1.57%
Below B1.45%
B0.0%
BB0.0%
US Government0.0%

BNDX’s Top Bond Sectors are ratings of A, AA, AAA, BBB, and Others at 29.19%, 26.79%, 21.59%, 19.41%, and 1.57%. The fund is less weighted towards Below B (1.45%), B (0.0%), and BB (0.0%) rated bonds.

Performance

Annual Returns

QQQ vs. BNDX - Annual Returns

YearQQQBNDX
202048.6%4.6%
201939.12%7.88%
2018-0.14%2.94%
201732.7%2.4%
20167.01%4.67%
20159.54%1.08%
201419.12%8.83%
201336.6%0.0%
201218.09%0.0%
20113.44%0.0%
201019.89%0.0%

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 2014 was the strongest year for BNDX, returning 8.83% on an annual basis. The poorest year for BNDX in the last ten years was 2013, with a yield of 0.0%. Most years the Vanguard Total International Bond Index Fund ETF Shares has given investors modest returns, such as in 2015, 2017, and 2018, when gains were 1.08%, 2.4%, and 2.94% respectively.

Portfolio Growth

QQQ vs. BNDX - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
QQQ$10,000$38,25121.27%
BNDX$10,000$13,6954.63%

A $10,000 investment in QQQ would have resulted in a final balance of $38,251. This is a profit of $28,251 over 7 years and amounts to a compound annual growth rate (CAGR) of 21.27%.

With a $10,000 investment in BNDX, the end total would have been $13,695. This equates to a $3,695 profit over 7 years and a compound annual growth rate (CAGR) of 4.63%.

QQQ’s CAGR is 16.64 percentage points higher than that of BNDX and as a result, would have yielded $24,556 more on a $10,000 investment. Thus, QQQ outperformed BNDX by 16.64% annually.

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