We Compare QQQ vs QQQE:
Invesco QQQ ETF (QQQ) vs Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE)
Choosing between two great investment options, QQQ vs QQQE, can be difficult. However, they are both great funds and popular among investors.
This article compares these ETFs for performance, holdings, minimum investment, and cost.
QQQ vs QQQE
The main difference between QQQ and QQQE is the company that offers the fund. QQQ is an Invesco fund, while QQQE is a fund from Direxion.
They also differ in the index they track. For example, QQQ tracks the NASDAQ-100 Index, while QQQE tracks the NASDAQ-100 Equal Weighted Index.
QQQ is an Invesco Fund
QQQE is a Direxion Fund
QQQ and QQQE have different holding structures. For example, QQQ's top ten holdings make up 53% of its total assets, while QQQE's are equally weighted, so the top ten holdings make up 11%.
Therefore, there is a significant difference between QQQ and QQQE in diversification. QQQ is highly concentrated, and QQQE is well diversified.
QQQ
- Inception Date: 1999
- Tracks the Nasdaq-100 Index
- Expense Ratio: 0.20%
- Number Of Stocks: 103
- Top 10 Holdings: 53%
QQQE
- Fund Inception: 2012
- Offered By Direxion
- Tracks NASDAQ-100 Equal-Weighted Index
- Expense Ratio 0.35%
- Number Of Stocks: 103
- Top 10 Holdings: 11%
Lastly, the overall size of QQQ is more extensive, with $200 billion in assets under management. On the other hand, the overall size of the QQQE is smaller, with $682 million in assets.
So, higher liquidity can be expected from the QQQ.
Both ETFs are AA as per MSCI ESG ratings.
Let's continue to compare these ETFs and determine which one is better.
QQQ vs QQQE 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. This is because earning a return is the purpose of investment after managing risk.
It's essential to keep in mind that the past performance of an ETF does not guarantee future performance. Yet, it helps understand return earning potential and volatility.
Here is how QQQ and QQQE performance compares:
QQQ and QQQE have had similar performance returns over the last ten years. However, QQQ has outperformed QQQE by over 3% annually over the previous 10 years.
Here is another chart that shows the performance of QQQ and QQQE:
Similarities between QQQ and QQQE:
The following are some of the similarities between QQQ and QQQE:
- Both Invest In The NASDAQ-100.
- They Have 103 Holdings.
- MSCI ESG Rating Of AA.
- Both ETFs Are Heavily Weighted Toward The Technology Sector
QQQ vs QQQE Holdings
Holding structure refers to investment made by ETF in the companies. One of the significant differences between QQQ and QQQE lies in the area of holdings.
QQQE invests in the Equally Weighted NASDAQ-100 index, and QQQ invests in the NASDAQ-100 index.
The weighted index reflects the performance of all companies that form part of the NASDAQ 100. So, it invests in all of the securities equally.
Therefore, QQQE is more diversified. On the other hand, more than half the investment of the QQQ is concentrated in the top ten holdings.
Let's further analyze the holding structure for both QQQ and QQQE:
The top ten holdings for QQQ and QQQE amount to 52% and 11%, respectively.
So, if you are looking for a well-diversified investment, QQQE might be a better option. However, investing in QQQ can also make for a good choice if you believe in the performance of elite companies like Apple, Amazon, and Microsoft.
QQQ vs QQQE Overlap
There is an overlap between ONEQ and QQQ that includes 102 stocks. This is because all the holdings in QQQ are in QQQE and vice versa.
Here are QQQ and QQQE holdings overlap:
This difference is in the overlap by weight. Since QQQE is equally weighted, there is only a 51% overlap with QQQ in this area.
QQQE has more diversification compared to QQQ.
QQQ vs QQQE Expense Ratio
The difference in expense ratio between QQQ and QQQE is 0.15%. Direxion's QQQE has an expense ratio of 0.35%, while QQQ's expense ratio is 0.20%.
Expense ratios make a difference for investors.
Example:
Assuming you start with an initial investment of $100,000 and contribute $10,000 yearly over 30 years.
Your account will have $90,000 less because of the extra 0.15% expense ratio.
This difference for a long-term investor could be considered significant.
Winner: QQQ with the lowest expense ratio of 0.20%
QQQ vs QQQE Differences
The main difference between QQQ and QQQE is the company that offers the ETF. QQQE is provided by Direxion, while Invesco provides QQQ.
QQQE is issued and managed by Direxion. On the contrary, QQQ is issued and managed by the Invesco managing company.
The expense ratio for the QQQ amounts to 0.20%, and QQQE amounts to 0.35%. This means QQQE is more expensive to own compared to QQQ.
The size of assets under QQQE amounts to $679 million, and the asset size for QQQ amounts to $184 billion. This means the size of QQQ is larger than QQQE, and therefore QQQ has more liquidity.
Therefore, we can expect some more stability from QQQ.
QQQE Description
- Fund Inception: 2012
- Offered By Direxion
- Tracks NASDAQ-100 Equal Weighted Index
- Expense Ratio 0.35%
- Number Of Stocks: 103
- Top 10 Holdings: 11%
The Direxion NASDAQ-100® Equal Weighted Index Shares (QQQE) launched in 2012 and tracks the NASDAQ-100 Equal Weighted Index.
QQQE applies an equal-weighting scheme to the NASDAQ 100, an index that comprises 100 of the largest domestic and international non-financial companies listed on the NASDAQ Stock Market based on market capitalization.
It has over $670 million in net assets.
Direxion's QQQE is heavily tilted towards growth stocks, which should be noted for potential new investors.
QQQE Performance
QQQE seeks to replicate the performance of the NASDAQ-100 Equal Weighted Index.
It has resulted in excellent performance returns over the last 10 years:
In addition, the ETF gives access to over 100 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, QQQE has performed well since its inception in 2012.
The ETF has a beta of 1.17 and a standard deviation of 0.46% for the trailing three-year period. This makes QQQE a medium-risk choice in its class.
The fund has roughly 103 holdings.
Direxion's QQQE 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.
QQQE Holdings
The top 10 holdings for QQQE make up 11% of its total assets.
Direxion's QQQE holds Constellation, Lululemon, Exelon, Ross, Kraft, and over 100 other stocks.
No Minimum Investment
QQQE 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 QQQE or QQQ?
QQQE and QQQ are similar investments. They have had a similar performance over the last 10 years and have the same holdings in different weights.
Both ETFs are well-known and managed by reputable companies such as Direxion (QQQE) and Invesco (QQQ).
QQQE offers more diversification and less volatility since it equally holds the companies.
Which is better will likely depend on which brokerage you prefer to use.
Direxion customers will likely prefer QQQE.
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, buying QQQ, QQQE, and thousands of other stocks/ETFs.
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Winner: QQQ
Based on the facts and information, we conclude that QQQE and QQQ are stable funds.
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.