The Invesco QQQ Trust (QQQ) and the Vanguard Total International Stock Index Fund ETF Shares (VXUS) are both among the Top 100 ETFs. QQQ is a Invesco Large Growth fund and VXUS is a Vanguard Foreign Large Blend fund. So, what’s the difference between QQQ and VXUS? And which fund is better?
The expense ratio of QQQ is 0.12 percentage points higher than VXUS’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 VXUS over the past ten years.
In this article, we’ll compare QQQ vs. VXUS. We’ll look at annual returns and portfolio growth, as well as at their holdings and fund composition. Moreover, I’ll also discuss QQQ’s and VXUS’s performance, risk metrics, and industry exposure and examine how these affect their overall returns.
Summary
| QQQ | VXUS | |
| Name | Invesco QQQ Trust | Vanguard Total International Stock Index Fund ETF Shares |
| Category | Large Growth | Foreign Large Blend |
| Issuer | Invesco | Vanguard |
| AUM | 174.51B | 404.73B |
| Avg. Return | 21.27% | 8.41% |
| Div. Yield | 0.49% | 2.44% |
| Expense Ratio | 0.2% | 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 International Stock Index Fund ETF Shares (VXUS) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 404.73B total assets under management and has yielded an average annual return of 8.41% over the past 10 years. The fund has a dividend yield of 2.44% with an expense ratio of 0.08%.
QQQ’s dividend yield is 1.95% lower than that of VXUS (0.49% vs. 2.44%). Also, QQQ yielded on average 12.86% more per year over the past decade (21.27% vs. 8.41%). The expense ratio of QQQ is 0.12 percentage points higher than VXUS’s (0.2% vs. 0.08%).
Fund Composition
Industry Exposure
| QQQ | VXUS | |
| Technology | 45.46% | 13.07% |
| Industrials | 2.61% | 12.94% |
| Energy | 0.0% | 4.55% |
| Communication Services | 19.55% | 7.06% |
| Utilities | 0.89% | 2.94% |
| Healthcare | 7.04% | 9.19% |
| Consumer Defensive | 4.68% | 7.83% |
| Real Estate | 0.0% | 3.79% |
| Financial Services | 2.51% | 17.64% |
| Consumer Cyclical | 17.27% | 12.64% |
| Basic Materials | 0.0% | 8.37% |
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 International Stock Index Fund ETF Shares (VXUS) has the most exposure to the Financial Services sector at 17.64%. This is followed by Technology and Industrials at 13.07% and 12.94% respectively. Real Estate (3.79%), Energy (4.55%), and Communication Services (7.06%) only make up 15.40% of the fund’s total assets.
VXUS’s mid-section with moderate exposure is comprised of Consumer Defensive, Basic Materials, Healthcare, Consumer Cyclical, and Industrials stocks at 7.83%, 8.37%, 9.19%, 12.64%, and 12.94%.
QQQ is 32.39% more exposed to the Technology sector than VXUS (45.46% vs 13.07%). QQQ’s exposure to Communication Services and Consumer Cyclical stocks is 12.49% higher and 4.63% higher respectively (19.55% vs. 7.06% and 17.27% vs. 12.64%). In total, Real Estate, Energy, and Utilities also make up 10.39% less of the fund’s holdings compared to VXUS (0.89% vs. 11.28%).
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%.
| VXUS Holdings | Weight |
| Taiwan Semiconductor Manufacturing Co Ltd | 1.62% |
| Tencent Holdings Ltd | 1.41% |
| Alibaba Group Holding Ltd Ordinary Shares | 1.26% |
| Nestle SA | 1.1% |
| Samsung Electronics Co Ltd | 1.05% |
| ASML Holding NV | 0.86% |
| Roche Holding AG | 0.81% |
| Toyota Motor Corp | 0.67% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.61% |
| Novartis AG | 0.6% |
VXUS’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, and Samsung Electronics Co Ltd at 1.62%, 1.41%, 1.26%, 1.1%, and 1.05%.
ASML Holding NV (0.86%), Roche Holding AG (0.81%), and Toyota Motor Corp (0.67%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VXUS’s holdings at 0.61% and 0.6%.
Performance
Annual Returns
| Year | QQQ | VXUS |
| 2020 | 48.6% | 11.32% |
| 2019 | 39.12% | 21.58% |
| 2018 | -0.14% | -14.42% |
| 2017 | 32.7% | 27.52% |
| 2016 | 7.01% | 4.72% |
| 2015 | 9.54% | -4.28% |
| 2014 | 19.12% | -4.17% |
| 2013 | 36.6% | 15.16% |
| 2012 | 18.09% | 18.22% |
| 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 2017 was the strongest year for VXUS, returning 27.52% on an annual basis. The poorest year for VXUS in the last ten years was 2018, with a yield of -14.42%. Most years the Vanguard Total International Stock Index Fund ETF Shares has given investors modest returns, such as in 2010, 2016, and 2020, when gains were 0.0%, 4.72%, and 11.32% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| QQQ | $10,000 | $61,704 | 21.27% |
| VXUS | $10,000 | $19,315 | 8.41% |
A $10,000 investment in QQQ would have resulted in a final balance of $61,704. This is a profit of $51,704 over 9 years and amounts to a compound annual growth rate (CAGR) of 21.27%.
With a $10,000 investment in VXUS, the end total would have been $19,315. This equates to a $9,315 profit over 9 years and a compound annual growth rate (CAGR) of 8.41%.
QQQ’s CAGR is 12.86 percentage points higher than that of VXUS and as a result, would have yielded $42,389 more on a $10,000 investment. Thus, QQQ outperformed VXUS by 12.86% annually.
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