In this article, we compare ONEQ vs QQQ.
However, it can be challenging to assess if you should invest in ONEQ or QQQ.
This article has compared these ETFs in basic information, performance evaluation, holding, and related facts.
Let's start with the main difference between ONEQ vs QQQ.
ONEQ vs QQQ
The main difference between ONEQ and QQQ is the index they track. ONEQ tracks the NASDAQ Composite Index, while QQQ tracks the NASDAQ 100 Index.
ONEQ matches price and performance with the NASDAQ Composite index. The NASDAQ composite index includes almost all the securities listed on the NASDAQ exchange.
So, it represents overall market movement and performance.
ONEQ
- Fund Inception: 2003
- Offered By Fidelity
- Tracks NASDAQ Composite
- Expense Ratio 0.21%
- Number Of Stocks: 1,120
QQQ
- Inception Date: 1999
- Tracks the Nasdaq-100 Index
- Expense Ratio: 0.20%
- Number Of Stocks: 103
- Top 10 Holdings: 53%
On the other hand, QQQ is dependent on the NASDAQ-100 index. It means this index is dependent on the top 100 largest non-financial companies.
So, if the performance of these companies is enhanced, it leads to an increase in the value of ETFs and vice versa.
In addition, there are many other differences between ONEQ and QQQ in terms of holdings, performance, risk, return, management fee, and many different dynamics.
Let's look at these ETFs and determine which one is better.
ONEQ vs QQQ Performance
The performance of an ETF is dependent on the underlying holding. So, the performance of an ETF is directly reliant on the assets.
Further, it's one of the most crucial factors investors evaluate while investing. It's because earning a return is the purpose of investment after managing risk.
Although, the past performance of ETF does not guarantee future performance. Yet, it helps understand return earning potential and volatility.
Here is how ONEQ and QQQ performance compares:
The monthly, quarterly, and YTD statistics suggest there is not much difference between ONEQ and QQQ in terms of volatility and return.
Here is another chart that shows the performance of ONEQ and QQQ:
Similarities between ONEQ and QQQ
The following are some of the similarities between ONEQ and QQQ:
- Both are ETFs.
- The expense ratio for the ETFs is the same, with a minor difference of 0.01%.
- Both ETFs fall in large-cap growth companies of the index.
- MSI ESG ratings for both ETFs is AA.
- Both ETFs are passively managed, and performance is based on index movement.
ONEQ vs QQQ Holdings
Holding structure refers to investment made by ETF in the companies. One of the significant differences between ONEQ and QQQ lies in their holdings.
ONEQ invests in the composite NASDAQ, and QQQ invests in the NASDAQ-100 index.
Composite NASDAQ is a weighted index that reflects the performance of all companies that form part of the NASDAQ.
It also includes American Depositary Receipts (ADR), Real Estate Investment Trusts (REITs), and limited partnerships.
So, there is extensive diversification.
On the contrary, NASDAQ-100 refers to the top hundred companies in the non-financial companies.
Let's further analyze the holding structure for both ONEQ and QQQ.
The top ten holdings for ONEQ and QQQ amount to 47% and 52%, respectively.
It means both of these ETFs are concentrated in the NASDAQ. Further, the top ten ETF companies are more or less the same.
However, the proportion of the investment is different.
So, we understand both ETFs have invested around 50% in more or less the same companies. However, there is a difference in the other half of the investment.
Another half of the investment for ONEQ is invested in the rest of the companies that form part of the index. It makes thousands of companies.
So, it’s highly diversified.
On the contrary, the other half of the investment for QQQ is made in around 93 top companies.
ONEQ vs QQQ Overlap
There is an overlap between ONEQ and QQQ that includes 102 stocks. Almost all the holdings in QQQ are in ONEQ. But, only 9% of ONEQ's holdings are in QQQ.
Here are ONEQ and QQQ holdings overlap:
This overlap means ONEQ includes most of the holdings in QQQ and many more.
ONEQ has more diversification compared to QQQ.
ONEQ vs QQQ Differences
The main difference between ONEQ and QQQ is the company that offers the ETF. ONEQ is provided by Fidelity, while Invesco provides QQQ.
ONEQ is issued and managed by Fidelity managing company. On the contrary, QQQ is issued and managed by the Invesco managing company.
The expense ratio for the ONEQ amounts to 0.21%, and QQQ amounts to 0.20%. It means there is not much difference in terms of managing fees.
The size of assets under ONEQ amounts to $4 billion, and the asset size for QQQ amounts to $196 billion. This means the size of QQQ is larger than ONEQ, and therefore QQQ has more liquidity.
Therefore, we can expect some more stability from QQQ.
Similarly, there is a more significant difference in trade volume for these ETFs. The dollar trading value for QQQ is much higher.
However, the number of holdings for the ONEQ amount to 1,120, which means this ETF is well diversified and moves in line with the index.
So, if the overall market performs well and the index increases, the value of the ETF increases and vice versa.
Although, it's important to note that the top ten holding structures for ONEQ and QQQ do not deviate significantly.
For instance, the top ten holdings for ONEQ amount to 47%, while for QQQ, it amounts to 52%.
Hence, around half the investment for both ETFs contains almost equal risk and reward.
However, the other half of the investment for ONEQ is distributed among thousands of companies in the index, and another half of QQQ is distributed to 93 companies only.
Does ONEQ Pay a Dividend?
Yes, the current dividend for ONEQ is 0.67%. This is paid quarterly to investors and amounts to $0.34 per share.
ONEQ has a higher dividend yield than other growth ETFs like QQQ, which has a dividend yield of 0.48%.
ONEQ Description
- Fund Inception: 2003
- Offered By Fidelity
- Tracks NASDAQ Composite
- Expense Ratio 0.21%
- Number Of Stocks: 1,120
The Fidelity NASDAQ Composite Index ETF (ONEQ) was launched in 2003 and tracks the NASDAQ Composite Index.
ONEQ is passively managed and only tracks Nasdaq-listed companies and ignores those trading on the NYSE or other exchanges.
It has over $4 billion in net assets.
Fidelity's ONEQ is heavily tilted towards growth stocks, which should be noted for potential new investors.
ONEQ Performance
ONEQ seeks to replicate the performance of the NASDAQ Composite Index.
It has resulted in excellent performance returns over the last 10 years:
In addition, the ETF gives access to over 1,120 of the most prominent publicly-traded companies in the United States. It also diversifies all market capitalizations but focuses on large-cap growth companies.
As you can see, ONEQ has performed well since its inception in 2003.
The ETF has a beta of 1.25 and a standard deviation of 18.34% for the trailing three-year period. This makes ONEQ a medium-risk choice in its class.
The fund has roughly 1120 holdings.
Fidelity NASDAQ Composite Index ETF may be a good option for investors looking for Large-Cap Growth U.S. market exposure.
The benefits of this ETF include expense ratio and momentum.
ONEQ Holdings
The top 10 holdings for ONEQ make up 47% of its total assets.
Fidelity's ONEQ holds Apple, Microsoft, Amazon, Alphabet, Tesla, and over 1,000 other stocks.
No Minimum Investment
ONEQ and QQQ are exchange-traded funds (ETFs), so there is no minimum investment.
The only requirement is the need to purchase at least one total share.
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QQQ Description
- Tracks the Nasdaq-100 Index
- Expense Ratio: 0.20%
- Number Of Stocks: 103
- Top 10 Holdings: 53%
- Technology Weighted
Invesco (QQQ) is a growth ETF launched in 1999 by Nasdaq as the Nasdaq 100 Trust. QQQ is designed to track the Nasdaq 100 index.
The name was changed in the early 2000s after PowerShare and Invesco acquired the index.
The fund closely tracks the standards and performance of the Nasdaq 100 Trust to replicate its return results.
The Nasdaq 100 Index adopts a modified capitalization methodology that uses individual weights of included items according to their market capitalization.
Weighting allows constraints to limit the influence of the largest companies and balance the index with all of its members.
To accomplish this, Nasdaq reviews the index's composition each quarter and adjusts weightings if the distribution requirements are unmet.
QQQ Performance
Over the last 10 years, QQQ has outperformed the S&P 500 with an average return of 20.34% per year.
Here is the growth of $10,000 over 10 years with QQQ:
QQQ has performed well over the last 10 years, but there is no guarantee that the next 10 years will look the same.
Since its inception, QQQ has shown outstanding performance, consistently outperforming the S&P 500 benchmark index.
The fund ranks in the top 1% of large-cap growth funds.
Due to QQQ's outstanding performance, the fund has become one of the most popular funds among long-term investors.
It now has $196 billion in total assets.
QQQ Holdings
QQQ is the fourth-most popular ETF globally, with 103 securities holdings, most of which are top technological companies.
These companies cut across various industries, including:
- Cloud Computing
- Payment Services
- Electric Vehicles
- Data Collection
QQQ excludes financial companies. Invesco's QQQ is a large capitalization index focused on technology companies.
Here are the top holdings for QQQ:
QQQ is primarily made up of Apple, Microsoft, Amazon, and Tesla.
Which Is Better ONEQ or QQQ?
ONEQ and QQQ are similar investments. They have had the same performance over the last 10 years and have almost the same expense ratio.
Both ETFs are well-known and managed by Fidelity (ONEQ) and Invesco (QQQ).
ONEQ offers more diversification and less volatility since it holds more stocks.
Which is better will likely depend on which brokerage you prefer to use.
Fidelity customers will likely prefer ONEQ.
Invesco customers will probably choose QQQ.
That said, slight differences could make QQQ better for some investors.
QQQ offers more liquidity with $196 billion in net assets.
It's important to consider costs and fees because they can cost you in the long run. That's why buying and selling your shares commission-free is essential.
Again a great way to do this is with M1 Finance.
You can purchase fractional shares for free, allowing you to buy QQQ, ONEQ, and thousands of other stocks/ETFs.
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Winner: QQQ
We conclude that ONEQ and QQQ are stable funds based on the facts and information.
I prefer QQQ because:
- QQQ is a highly stable ETF with more liquidity.
- The expense ratio is lower for the QQQ.
- QQQ is sufficiently diversified.
The decision might come down to which brokerage you prefer to use.
Frequently Asked Questions (FAQs)
How Many Companies Are There In ONEQ?
Fidelity's ONEQ holds Apple, Microsoft, Amazon, Alphabet, Tesla, and over 1,000 other stocks. The exact amount of companies that are currently in ONEQ is 1,120.