The Invesco QQQ Trust (QQQ) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. QQQ is a Invesco Large Growth fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between QQQ and VOE? And which fund is better?
The expense ratio of QQQ is 0.13 percentage points higher than VOE’s (0.2% vs. 0.07%). QQQ also has a higher exposure to the technology sector and a lower standard deviation. Overall, QQQ has provided higher returns than VOE over the past ten years.
In this article, we’ll compare QQQ vs. VOE. We’ll look at holdings and risk metrics, as well as at their performance and portfolio growth. Moreover, I’ll also discuss QQQ’s and VOE’s industry exposure, fund composition, and annual returns and examine how these affect their overall returns.
Summary
| QQQ | VOE | |
| NameInvesco QQQ TrustVanguard Mid-Cap Value Index Fund ETF Shares | ||
| Category | Large Growth | Mid-Cap Value |
| Issuer | Invesco | Vanguard |
| AUM | 174.51B | 26.78B |
| Avg. Return | 21.27% | 12.52% |
| Div. Yield | 0.49% | 1.87% |
| Expense Ratio | 0.2% | 0.07% |
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 Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.
QQQ’s dividend yield is 1.38% lower than that of VOE (0.49% vs. 1.87%). Also, QQQ yielded on average 8.75% more per year over the past decade (21.27% vs. 12.52%). The expense ratio of QQQ is 0.13 percentage points higher than VOE’s (0.2% vs. 0.07%).
Fund Composition
Industry Exposure
| QQQ | VOE | |
| Technology | 45.46% | 9.85% |
| Industrials | 2.61% | 9.4% |
| Energy | 0.0% | 5.69% |
| Communication Services | 19.55% | 5.27% |
| Utilities | 0.89% | 10.93% |
| Healthcare | 7.04% | 7.04% |
| Consumer Defensive | 4.68% | 4.85% |
| Real Estate | 0.0% | 11.48% |
| Financial Services | 2.51% | 18.26% |
| Consumer Cyclical | 17.27% | 11.8% |
| Basic Materials | 0.0% | 5.44% |
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 Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.
VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.
QQQ is 35.61% more exposed to the Technology sector than VOE (45.46% vs 9.85%). QQQ’s exposure to Communication Services and Consumer Cyclical stocks is 14.28% higher and 5.47% higher respectively (19.55% vs. 5.27% and 17.27% vs. 11.8%). In total, Real Estate, Energy, and Utilities also make up 27.21% less of the fund’s holdings compared to VOE (0.89% vs. 28.10%).
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%.
| VOE Holdings | Weight |
| Carrier Global Corp Ordinary Shares | 1.28% |
| International Flavors & Fragrances Inc | 1.13% |
| Motorola Solutions Inc | 1.12% |
| Discover Financial Services | 1.09% |
| Welltower Inc | 1.05% |
| Corteva Inc | 0.99% |
| Valero Energy Corp | 0.97% |
| Corning Inc | 0.95% |
| Willis Towers Watson PLC | 0.9% |
| D.R. Horton Inc | 0.89% |
VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.
Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.
Performance
Annual Returns
| Year | QQQ | VOE |
| 2020 | 48.6% | 2.5% |
| 2019 | 39.12% | 27.98% |
| 2018 | -0.14% | -12.41% |
| 2017 | 32.7% | 17.05% |
| 2016 | 7.01% | 15.26% |
| 2015 | 9.54% | -1.8% |
| 2014 | 19.12% | 13.98% |
| 2013 | 36.6% | 37.65% |
| 2012 | 18.09% | 16.04% |
| 2011 | 3.44% | -0.32% |
| 2010 | 19.89% | 21.83% |
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 VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| QQQ | $10,000 | $76,522 | 21.27% |
| VOE | $10,000 | $33,655 | 12.52% |
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 VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.
QQQ’s CAGR is 8.75 percentage points higher than that of VOE and as a result, would have yielded $42,867 more on a $10,000 investment. Thus, QQQ outperformed VOE by 8.75% annually.
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