QQQ vs. EFV: What’s The Difference?

The Invesco QQQ Trust (QQQ) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. QQQ is a Invesco Large Growth fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between QQQ and EFV? And which fund is better?

The expense ratio of QQQ is 0.19 percentage points lower than EFV’s (0.2% vs. 0.39%). QQQ also has a higher exposure to the technology sector and a lower standard deviation. Overall, QQQ has provided higher returns than EFV over the past ten years.

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

Summary

QQQ EFV
Name Invesco QQQ Trust iShares MSCI EAFE Value ETF
Category Large Growth Foreign Large Value
Issuer Invesco iShares
AUM 174.51B 14.37B
Avg. Return 21.27% 3.99%
Div. Yield 0.49% 2.94%
Expense Ratio 0.2% 0.39%

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 iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.

QQQ’s dividend yield is 2.45% lower than that of EFV (0.49% vs. 2.94%). Also, QQQ yielded on average 17.28% more per year over the past decade (21.27% vs. 3.99%). The expense ratio of QQQ is 0.19 percentage points lower than EFV’s (0.2% vs. 0.39%).

Fund Composition

Industry Exposure

QQQ vs. EFV - Industry Exposure

QQQ EFV
Technology 45.46% 2.98%
Industrials 2.61% 11.6%
Energy 0.0% 6.6%
Communication Services 19.55% 6.46%
Utilities 0.89% 6.14%
Healthcare 7.04% 9.19%
Consumer Defensive 4.68% 6.82%
Real Estate 0.0% 5.06%
Financial Services 2.51% 26.55%
Consumer Cyclical 17.27% 9.0%
Basic Materials 0.0% 9.59%

The Invesco QQQ Trust (QQQ) has the most exposure to the Technology sector at 45.46%. This is followed by Communication Services and Consumer Cyclical at 19.55% and 17.27% respectively. Real Estate (0.0%), Energy (0.0%), and Utilities (0.89%) only make up 0.89% of the fund’s total assets.

QQQ’s mid-section with moderate exposure is comprised of Financial Services, Industrials, Consumer Defensive, Healthcare, and Consumer Cyclical stocks at 2.51%, 2.61%, 4.68%, 7.04%, and 17.27%.

The iShares MSCI EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.

EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.

QQQ is 42.48% more exposed to the Technology sector than EFV (45.46% vs 2.98%). QQQ’s exposure to Communication Services and Consumer Cyclical stocks is 13.09% higher and 8.27% higher respectively (19.55% vs. 6.46% and 17.27% vs. 9.0%). In total, Real Estate, Energy, and Utilities also make up 16.91% less of the fund’s holdings compared to EFV (0.89% vs. 17.80%).

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%.

EFV - Holdings

EFV Holdings Weight
Novartis AG 2.41%
Toyota Motor Corp 2.21%
Commonwealth Bank of Australia 1.59%
Siemens AG 1.45%
Sanofi SA 1.42%
HSBC Holdings PLC 1.4%
TotalEnergies SE 1.35%
Allianz SE 1.23%
GlaxoSmithKline PLC 1.18%
Rio Tinto PLC 1.1%

EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.

HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.

Performance

Annual Returns

QQQ vs. EFV - Annual Returns

Year QQQ EFV
2020 48.6% -2.78%
2019 39.12% 15.97%
2018 -0.14% -14.88%
2017 32.7% 21.22%
2016 7.01% 4.87%
2015 9.54% -5.89%
2014 19.12% -5.65%
2013 36.6% 22.61%
2012 18.09% 17.52%
2011 3.44% -12.24%
2010 19.89% 3.18%

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 2013 was the strongest year for EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.

Portfolio Growth

QQQ vs. EFV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
QQQ $10,000 $76,522 21.27%
EFV $10,000 $14,134 3.99%

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 EFV, the end total would have been $14,134. This equates to a $4,134 profit over 11 years and a compound annual growth rate (CAGR) of 3.99%.

QQQ’s CAGR is 17.28 percentage points higher than that of EFV and as a result, would have yielded $62,388 more on a $10,000 investment. Thus, QQQ outperformed EFV by 17.28% annually.


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