The Invesco QQQ Trust (QQQ) and the Schwab U.S. Large Cap Growth ETF (SCHG) are both among the Top 100 ETFs. QQQ is a Invesco Large Growth fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between SCHG vs QQQ? And which fund is better?
The expense ratio of QQQ is 0.16 percentage points higher than SCHG’s (0.2% vs. 0.04%). QQQ also has a higher exposure to the technology sector and a higher standard deviation. Overall, QQQ has provided higher returns than SCHG over the past ten years.
In this article, we’ll compare QQQ vs. SCHG. We’ll look at fund composition and annual returns, as well as at their industry exposure and portfolio growth. Moreover, I’ll also discuss QQQ’s and SCHG’s holdings, performance, and risk metrics and examine how these affect their overall returns.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
Summary QQQ vs SCHG
| QQQ | SCHG | |
| Name | Invesco QQQ Trust | Schwab U.S. Large Cap Growth ETF |
| Category | Large Growth | Large Growth |
| Issuer | Invesco | Schwab ETFs |
| AUM | 174.51B | 15.16B |
| Avg. Return | 21.27% | 17.81% |
| Div. Yield | 0.49% | 0.43% |
| Expense Ratio | 0.2% | 0.04% |
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 Schwab U.S. Large Cap Growth ETF (SCHG) is a Large Growth fund that is issued by Schwab ETFs. It currently has 15.16B total assets under management and has yielded an average annual return of 17.81% over the past 10 years. The fund has a dividend yield of 0.43% with an expense ratio of 0.04%.
QQQ’s dividend yield is 0.06% higher than that of SCHG (0.49% vs. 0.43%). Also, QQQ yielded on average 3.46% more per year over the past decade (21.27% vs. 17.81%). The expense ratio of QQQ is 0.16 percentage points higher than SCHG’s (0.2% vs. 0.04%).
FYI: The best way I've found to invest is through M1 Finance. It's free and you even get an instant line of credit and 100$! Have a look here (link to M1 Finance).
Fund Composition
Industry Exposure
| QQQ | SCHG | |
| Technology | 45.46% | 39.21% |
| Industrials | 2.61% | 3.01% |
| Energy | 0.0% | 0.2% |
| Communication Services | 19.55% | 17.07% |
| Utilities | 0.89% | 0.0% |
| Healthcare | 7.04% | 12.05% |
| Consumer Defensive | 4.68% | 2.15% |
| Real Estate | 0.0% | 1.64% |
| Financial Services | 2.51% | 7.98% |
| Consumer Cyclical | 17.27% | 15.01% |
| Basic Materials | 0.0% | 1.68% |
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 Schwab U.S. Large Cap Growth ETF (SCHG) has the most exposure to the Technology sector at 39.21%. This is followed by Communication Services and Consumer Cyclical at 17.07% and 15.01% respectively. Energy (0.2%), Real Estate (1.64%), and Basic Materials (1.68%) only make up 3.52% of the fund’s total assets.
SCHG’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 2.15%, 3.01%, 7.98%, 12.05%, and 15.01%.
QQQ is 6.25% more exposed to the Technology sector than SCHG (45.46% vs 39.21%). QQQ’s exposure to Communication Services and Consumer Cyclical stocks is 2.48% higher and 2.26% higher respectively (19.55% vs. 17.07% and 17.27% vs. 15.01%). In total, Real Estate, Energy, and Utilities also make up 0.95% less of the fund’s holdings compared to SCHG (0.89% vs. 1.84%).
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%.
| SCHG Holdings | Weight |
| Apple Inc | 11.49% |
| Microsoft Corp | 10.91% |
| Amazon.com Inc | 7.89% |
| Facebook Inc A | 4.45% |
| Alphabet Inc A | 3.93% |
| Alphabet Inc Class C | 3.82% |
| Tesla Inc | 2.8% |
| NVIDIA Corp | 2.67% |
| Visa Inc Class A | 2.12% |
| UnitedHealth Group Inc | 2.02% |
SCHG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 11.49%, 10.91%, 7.89%, 4.45%, and 3.93%.
Alphabet Inc Class C (3.82%), Tesla Inc (2.8%), and NVIDIA Corp (2.67%) have a slightly smaller but still significant weight. Visa Inc Class A and UnitedHealth Group Inc are also represented in the SCHG’s holdings at 2.12% and 2.02%.
Performance
Annual Returns
| Year | QQQ | SCHG |
| 2020 | 48.6% | 39.13% |
| 2019 | 39.12% | 36.21% |
| 2018 | -0.14% | -1.35% |
| 2017 | 32.7% | 28.04% |
| 2016 | 7.01% | 6.76% |
| 2015 | 9.54% | 3.26% |
| 2014 | 19.12% | 15.74% |
| 2013 | 36.6% | 33.96% |
| 2012 | 18.09% | 17.02% |
| 2011 | 3.44% | -0.67% |
| 2010 | 19.89% | 16.83% |
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 2020 was the strongest year for SCHG, returning 39.13% on an annual basis. The poorest year for SCHG in the last ten years was 2018, with a yield of -1.35%. Most years the Schwab U.S. Large Cap Growth ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 15.74%, 16.83%, and 17.02% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| QQQ | $10,000 | $63,827 | 21.27% |
| SCHG | $10,000 | $47,556 | 17.81% |
A $10,000 investment in QQQ would have resulted in a final balance of $63,827. This is a profit of $53,827 over 10 years and amounts to a compound annual growth rate (CAGR) of 21.27%.
With a $10,000 investment in SCHG, the end total would have been $47,556. This equates to a $37,556 profit over 10 years and a compound annual growth rate (CAGR) of 17.81%.
QQQ’s CAGR is 3.46 percentage points higher than that of SCHG and as a result, would have yielded $16,271 more on a $10,000 investment. Thus, QQQ outperformed SCHG by 3.46% annually.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
The Bottom Line
Investors should carefully consider a variety of factors when selecting an investment fund, including historical performance, management fees, and the fund’s underlying holdings.
It’s important to evaluate key metrics like the expense ratio and net assets, as well as the specific sectors and asset classes that the fund focuses on, such as large cap growth or consumer discretionary stocks.
Investors may consider these popular ETFs like SCHG and QQQ, which track well-known indices such as the Dow Jones Industrial Average. By conducting thorough research and due diligence, investors can make informed decisions about which funds to include in their portfolios.
Current recommendations:
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.
I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
