The Invesco QQQ Trust (QQQ) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. QQQ is a Invesco Large Growth fund and IVE is a iShares Large Value fund. So, what’s the difference between QQQ and IVE? And which fund is better?

The expense ratio of QQQ is 0.02 percentage points higher than IVE’s (0.2% vs. 0.18%). QQQ also has a higher exposure to the technology sector and a higher standard deviation. Overall, QQQ has provided higher returns than IVE over the past ten years.

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

Summary

QQQIVE
NameInvesco QQQ TrustiShares S&P 500 Value ETF
CategoryLarge GrowthLarge Value
IssuerInvescoiShares
AUM174.51B22.4B
Avg. Return21.27%11.68%
Div. Yield0.49%1.88%
Expense Ratio0.2%0.18%

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 S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.

QQQ’s dividend yield is 1.39% lower than that of IVE (0.49% vs. 1.88%). Also, QQQ yielded on average 9.59% more per year over the past decade (21.27% vs. 11.68%). The expense ratio of QQQ is 0.02 percentage points higher than IVE’s (0.2% vs. 0.18%).

Fund Composition

Industry Exposure

QQQ vs. IVE - Industry Exposure

QQQIVE
Technology45.46%9.41%
Industrials2.61%12.19%
Energy0.0%5.43%
Communication Services19.55%6.4%
Utilities0.89%4.82%
Healthcare7.04%15.4%
Consumer Defensive4.68%9.23%
Real Estate0.0%4.38%
Financial Services2.51%22.06%
Consumer Cyclical17.27%7.68%
Basic Materials0.0%2.99%

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 S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.

IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.

QQQ is 36.05% more exposed to the Technology sector than IVE (45.46% vs 9.41%). QQQ’s exposure to Communication Services and Consumer Cyclical stocks is 13.15% higher and 9.59% higher respectively (19.55% vs. 6.4% and 17.27% vs. 7.68%). In total, Real Estate, Energy, and Utilities also make up 13.74% less of the fund’s holdings compared to IVE (0.89% vs. 14.63%).

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%.

IVE - Holdings

IVE HoldingsWeight
Berkshire Hathaway Inc Class B3.05%
JPMorgan Chase & Co2.65%
The Walt Disney Co1.85%
Bank of America Corp1.67%
Johnson & Johnson1.57%
Exxon Mobil Corp1.41%
Pfizer Inc1.38%
Cisco Systems Inc1.35%
Verizon Communications Inc1.33%
Intel Corp1.25%

IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.

Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.

Performance

Annual Returns

QQQ vs. IVE - Annual Returns

YearQQQIVE
202048.6%1.24%
201939.12%31.71%
2018-0.14%-9.09%
201732.7%15.19%
20167.01%17.17%
20159.54%-3.24%
201419.12%12.14%
201336.6%31.69%
201218.09%17.45%
20113.44%-0.63%
201019.89%14.9%

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 2019 was the strongest year for IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% respectively.

Portfolio Growth

QQQ vs. IVE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
QQQ$10,000$76,52221.27%
IVE$10,000$31,35011.68%

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 IVE, the end total would have been $31,350. This equates to a $21,350 profit over 11 years and a compound annual growth rate (CAGR) of 11.68%.

QQQ’s CAGR is 9.59 percentage points higher than that of IVE and as a result, would have yielded $45,172 more on a $10,000 investment. Thus, QQQ outperformed IVE by 9.59% annually.

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