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QQQ vs. VT: What’s The Difference?

The Invesco QQQ Trust (QQQ) and the Vanguard Total World Stock Index Fund ETF Shares (VT) are both among the Top 100 ETFs. QQQ is a Invesco Large Growth fund and VT is a Vanguard N/A fund. So, what’s the difference between QQQ and VT? And which fund is better?

The expense ratio of QQQ is 0.12 percentage points higher than VT’s (0.2% vs. 0.08%). QQQ also has a higher exposure to the technology sector and a higher standard deviation. Overall, QQQ has provided higher returns than VT over the past ten years.

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

Summary

QQQVT
NameInvesco QQQ TrustVanguard Total World Stock Index Fund ETF Shares
CategoryLarge GrowthN/A
IssuerInvescoVanguard
AUM174.51B30.44B
Avg. Return21.27%10.42%
Div. Yield0.49%1.65%
Expense Ratio0.2%0.08%

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 Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.

QQQ’s dividend yield is 1.16% lower than that of VT (0.49% vs. 1.65%). Also, QQQ yielded on average 10.85% more per year over the past decade (21.27% vs. 10.42%). The expense ratio of QQQ is 0.12 percentage points higher than VT’s (0.2% vs. 0.08%).

Fund Composition

Industry Exposure

QQQ vs. VT - Industry Exposure

QQQVT
Technology45.46%19.63%
Industrials2.61%10.7%
Energy0.0%3.48%
Communication Services19.55%9.02%
Utilities0.89%2.6%
Healthcare7.04%11.58%
Consumer Defensive4.68%6.71%
Real Estate0.0%3.64%
Financial Services2.51%15.36%
Consumer Cyclical17.27%12.32%
Basic Materials0.0%4.97%

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 Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.

VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.

QQQ is 25.83% more exposed to the Technology sector than VT (45.46% vs 19.63%). QQQ’s exposure to Communication Services and Consumer Cyclical stocks is 10.53% higher and 4.95% higher respectively (19.55% vs. 9.02% and 17.27% vs. 12.32%). In total, Real Estate, Energy, and Utilities also make up 8.83% less of the fund’s holdings compared to VT (0.89% vs. 9.72%).

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%.

VT - Holdings

VT HoldingsWeight
Apple Inc2.85%
Microsoft Corp2.71%
Amazon.com Inc1.98%
Facebook Inc Class A1.1%
Alphabet Inc Class A0.97%
Alphabet Inc Class C0.95%
Tesla Inc0.7%
NVIDIA Corp0.64%
JPMorgan Chase & Co0.62%
Tencent Holdings Ltd0.6%

VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.

Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.

Performance

Annual Returns

QQQ vs. VT - Annual Returns

YearQQQVT
202048.6%16.74%
201939.12%26.8%
2018-0.14%-9.67%
201732.7%24.19%
20167.01%8.77%
20159.54%-1.88%
201419.12%3.97%
201336.6%22.98%
201218.09%17.33%
20113.44%-7.71%
201019.89%13.05%

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 VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% respectively.

Portfolio Growth

QQQ vs. VT - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
QQQ$10,000$76,52221.27%
VT$10,000$27,73910.42%

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 VT, the end total would have been $27,739. This equates to a $17,739 profit over 11 years and a compound annual growth rate (CAGR) of 10.42%.

QQQ’s CAGR is 10.85 percentage points higher than that of VT and as a result, would have yielded $48,783 more on a $10,000 investment. Thus, QQQ outperformed VT by 10.85% annually.


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