Compare and contrast key facts about Invesco QQQ (QQQ) and Vanguard Information Technology ETF (VGT).
QQQ and VGT are both exchange-traded funds (ETFs), meaning they are traded on stock exchanges and can be bought and sold throughout the day. QQQ is a passively managed fund by Invesco that tracks the performance of the NASDAQ-100 Index. It was launched on Mar 10, 1999. VGT is a passively managed fund by Vanguard that tracks the performance of the MSCI US Investable Market Information Technology 25/50 Index. It was launched on Jan 26, 2004. Both QQQ and VGT are passive ETFs, meaning that they are not actively managed but aim to replicate the performance of the underlying index as closely as possible.
Scroll down to visually compare performance, riskiness, drawdowns, and other indicators and decide which better suits your portfolio: QQQ or VGT.
VGT - Performance Comparison. In the year-to-date period, QQQ achieves a 12.40% return, which is significantly lower than VGT's 13.89% return. Over the past 10 years, QQQ has underperformed VGT with an annualized return of 18.56%, while VGT has yielded a comparatively higher 20.71% annualized return.
The Invesco QQQ Trust, long synonymous with tech, had a phenomenal year. But a less-discussed tech ETF, the SPDR NYSE Technology ETF, outperformed it in 2023.
The Invesco QQQ Trust (QQQ) ETF, which tracks the Nasdaq-100 index (NDX), has gained about 31% year-to-date, compared to the 9.8% gain in the S&P 500 Index (SPX). At the same time, the Vanguard Information Technology ETF (VGT), a technology sector-specific ETF, has generated similar returns.
VGT - Volatility Comparison. The current volatility for Invesco QQQ (QQQ) is 4.15%, while Vanguard Information Technology ETF (VGT) has a volatility of 5.31%. This indicates that QQQ experiences smaller price fluctuations and is considered to be less risky than VGT based on this measure.
For investors seeking an alternative to QQQ's mega-cap exposure, the Invesco S&P 500 Top 50 ETF (XLG) is an excellent option. XLG tracks the S&P 500 Top 50 Index, which, like QQQ, is heavily weighted towards top-tier tech and consumer stocks.
The QQQ ETF offers buy-and-hold investors low expenses and long-term growth potential with enough diversification to avoid the risks of betting on one company. On the downside, long-term investors in QQQ must deal with sector risk, possible overvaluation, and the absence of small caps.
QQQ has a higher expense ratio than QQQM by 0.05%. This can indicate that it's more expensive to invest in QQQ than QQQM. QQQ targets investing in US Equities, while QQQM targets investing in US Equities. QQQ is managed by Invesco, while QQQM is managed by Invesco.
VOO - Performance Comparison. In the year-to-date period, VGT achieves a 12.92% return, which is significantly higher than VOO's 11.79% return. Over the past 10 years, VGT has outperformed VOO with an annualized return of 20.61%, while VOO has yielded a comparatively lower 12.75% annualized return.
Currently there's no upside potential for VGT, based on the analysts' average price target. Is VGT a Buy, Sell or Hold? VGT has a consensus rating of Moderate Buy which is based on 235 buy ratings, 75 hold ratings and 5 sell ratings.
It should be noted that although VGT includes companies from the IT industry, it excludes stocks from certain tech-related areas like Amazon and Facebook since these are classified under the 'Consumer Discretionary' and 'Communication Services' sectors respectively in the GICS classification scheme.
In the past year, QQQ returned a total of 39.00%, which is significantly higher than VOO's 30.85% return. Over the past 10 years, QQQ has had annualized average returns of 18.52% , compared to 12.78% for VOO. These numbers are adjusted for stock splits and include dividends.
QQQM targets investing in US Equities, while VUG targets investing in US Equities. QQQM is managed by Invesco, while VUG is managed by Vanguard. Both QQQM and VUG are considered high-volume assets. They're less likely to be affected by issues like slippage and failed orders on Composer than low-volume assets.
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