The Invesco QQQ Trust (QQQ) and the iShares MSCI USA Min Vol Factor ETF (USMV) are both among the Top 100 ETFs. QQQ is a Invesco Large Growth fund and USMV is a iShares Large Blend fund. So, what’s the difference between QQQ and USMV? And which fund is better?
The expense ratio of QQQ is 0.05 percentage points higher than USMV’s (0.2% vs. 0.15%). QQQ also has a higher exposure to the technology sector and a higher standard deviation. Overall, QQQ has provided higher returns than USMV over the past ten years.
In this article, we’ll compare QQQ vs. USMV. We’ll look at risk metrics and performance, as well as at their portfolio growth and fund composition. Moreover, I’ll also discuss QQQ’s and USMV’s industry exposure, annual returns, and holdings and examine how these affect their overall returns.
Summary
| QQQ | USMV | |
| NameInvesco QQQ TrustiShares MSCI USA Min Vol Factor ETF | ||
| Category | Large Growth | Large Blend |
| Issuer | Invesco | iShares |
| AUM | 174.51B | 27.6B |
| Avg. Return | 21.27% | 13.89% |
| Div. Yield | 0.49% | 1.5% |
| Expense Ratio | 0.2% | 0.15% |
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 USA Min Vol Factor ETF (USMV) is a Large Blend fund that is issued by iShares. It currently has 27.6B total assets under management and has yielded an average annual return of 13.89% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 0.15%.
QQQ’s dividend yield is 1.01% lower than that of USMV (0.49% vs. 1.5%). Also, QQQ yielded on average 7.38% more per year over the past decade (21.27% vs. 13.89%). The expense ratio of QQQ is 0.05 percentage points higher than USMV’s (0.2% vs. 0.15%).
Fund Composition
Industry Exposure
| QQQ | USMV | |
| Technology | 45.46% | 20.53% |
| Industrials | 2.61% | 10.51% |
| Energy | 0.0% | 0.21% |
| Communication Services | 19.55% | 11.03% |
| Utilities | 0.89% | 6.93% |
| Healthcare | 7.04% | 18.42% |
| Consumer Defensive | 4.68% | 12.82% |
| Real Estate | 0.0% | 2.73% |
| Financial Services | 2.51% | 9.65% |
| Consumer Cyclical | 17.27% | 5.53% |
| Basic Materials | 0.0% | 1.65% |
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 USA Min Vol Factor ETF (USMV) has the most exposure to the Technology sector at 20.53%. This is followed by Healthcare and Consumer Defensive at 18.42% and 12.82% respectively. Basic Materials (1.65%), Real Estate (2.73%), and Consumer Cyclical (5.53%) only make up 9.91% of the fund’s total assets.
USMV’s mid-section with moderate exposure is comprised of Utilities, Financial Services, Industrials, Communication Services, and Consumer Defensive stocks at 6.93%, 9.65%, 10.51%, 11.03%, and 12.82%.
QQQ is 24.93% more exposed to the Technology sector than USMV (45.46% vs 20.53%). QQQ’s exposure to Communication Services and Consumer Cyclical stocks is 8.52% higher and 11.74% higher respectively (19.55% vs. 11.03% and 17.27% vs. 5.53%). In total, Real Estate, Energy, and Utilities also make up 8.98% less of the fund’s holdings compared to USMV (0.89% vs. 9.87%).
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%.
| USMV Holdings | Weight |
| Eli Lilly and Co | 1.64% |
| Microsoft Corp | 1.62% |
| T-Mobile US Inc | 1.51% |
| Accenture PLC Class A | 1.51% |
| Visa Inc Class A | 1.49% |
| Waste Management Inc | 1.45% |
| Adobe Inc | 1.45% |
| The Kroger Co | 1.44% |
| Johnson & Johnson | 1.42% |
| Gilead Sciences Inc | 1.42% |
USMV’s Top Holdings are Eli Lilly and Co, Microsoft Corp, T-Mobile US Inc, Accenture PLC Class A, and Visa Inc Class A at 1.64%, 1.62%, 1.51%, 1.51%, and 1.49%.
Waste Management Inc (1.45%), Adobe Inc (1.45%), and The Kroger Co (1.44%) have a slightly smaller but still significant weight. Johnson & Johnson and Gilead Sciences Inc are also represented in the USMV’s holdings at 1.42% and 1.42%.
Performance
Annual Returns
| Year | QQQ | USMV |
| 2020 | 48.6% | 5.6% |
| 2019 | 39.12% | 27.77% |
| 2018 | -0.14% | 1.36% |
| 2017 | 32.7% | 18.97% |
| 2016 | 7.01% | 10.5% |
| 2015 | 9.54% | 5.5% |
| 2014 | 19.12% | 16.34% |
| 2013 | 36.6% | 25.11% |
| 2012 | 18.09% | 11.04% |
| 2011 | 3.44% | 0.0% |
| 2010 | 19.89% | 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 2019 was the strongest year for USMV, returning 27.77% on an annual basis. The poorest year for USMV in the last ten years was 2011, with a yield of 0.0%. Most years the iShares MSCI USA Min Vol Factor ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 5.6%, 10.5%, and 11.04% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| QQQ | $10,000 | $52,252 | 21.27% |
| USMV | $10,000 | $27,607 | 13.89% |
A $10,000 investment in QQQ would have resulted in a final balance of $52,252. This is a profit of $42,252 over 8 years and amounts to a compound annual growth rate (CAGR) of 21.27%.
With a $10,000 investment in USMV, the end total would have been $27,607. This equates to a $17,607 profit over 8 years and a compound annual growth rate (CAGR) of 13.89%.
QQQ’s CAGR is 7.38 percentage points higher than that of USMV and as a result, would have yielded $24,645 more on a $10,000 investment. Thus, QQQ outperformed USMV by 7.38% annually.
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