The Invesco QQQ Trust (QQQ) and the iShares National Muni Bond ETF (MUB) are both among the Top 100 ETFs. QQQ is a Invesco Large Growth fund and MUB is a iShares Muni National Interm fund. So, what’s the difference between QQQ and MUB? And which fund is better?
The expense ratio of QQQ is 0.13 percentage points higher than MUB’s (0.2% vs. 0.07%). QQQ also has a high exposure to the technology sector while MUB is mostly comprised of AA bonds. Overall, QQQ has provided higher returns than MUB over the past ten years.
In this article, we’ll compare QQQ vs. MUB. We’ll look at performance and risk metrics, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss QQQ’s and MUB’s fund composition, industry exposure, and holdings and examine how these affect their overall returns.
|Name||Invesco QQQ Trust||iShares National Muni Bond ETF|
|Category||Large Growth||Muni National Interm|
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 National Muni Bond ETF (MUB) is a Muni National Interm fund that is issued by iShares. It currently has 22.71B total assets under management and has yielded an average annual return of 4.04% over the past 10 years. The fund has a dividend yield of 1.96% with an expense ratio of 0.07%.
QQQ’s dividend yield is 1.47% lower than that of MUB (0.49% vs. 1.96%). Also, QQQ yielded on average 17.23% more per year over the past decade (21.27% vs. 4.04%). The expense ratio of QQQ is 0.13 percentage points higher than MUB’s (0.2% vs. 0.07%).
|Facebook Inc Class A||4.01%|
|Facebook Inc A||4.01%|
|Alphabet Inc Class C||3.9%|
|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%.
|MUB Bond Sectors||Weight|
MUB’s Top Bond Sectors are ratings of AA, AAA, A, BBB, and Others at 60.38%, 18.39%, 15.04%, 6.0%, and 0.17%. The fund is less weighted towards BB (0.02%), Below B (0.0%), and B (0.0%) rated bonds.
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 MUB, returning 10.85% on an annual basis. The poorest year for MUB in the last ten years was 2013, with a yield of -3.26%. Most years the iShares National Muni Bond ETF has given investors modest returns, such as in 2015, 2017, and 2020, when gains were 2.99%, 4.61%, and 4.87% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 MUB, the end total would have been $15,333. This equates to a $5,333 profit over 11 years and a compound annual growth rate (CAGR) of 4.04%.
QQQ’s CAGR is 17.23 percentage points higher than that of MUB and as a result, would have yielded $61,189 more on a $10,000 investment. Thus, QQQ outperformed MUB by 17.23% annually.
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