QQQ vs IWF: What’s The Difference? 2023LAST UPDATED: July 25, 2023 | By Conrad Golly
The Investco QQQ Trust (QQQ) and the iShares Russell 1000 Growth ETF (IWF) are both interesting ETFs. QQQ tracks NASDAQ-100 Index and IWF tracks Russell 1000 Growth Index. So, what’s the difference between QQQ vs IWF? And which fund is better?
QQQ vs IWF: The expense ratio of QQQ is 0.20% and IWF is 0.18%. QQQ’s biggest holding is Microsoft Corp and IWF’s biggest holding is Apple Inc. Overall, QQQ has provided 2.69% Higher returns than IWF over the past ten years.In this article, we’ll compare QQQ vs IWF. We’ll look at holdings and performance, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss QQQ’s and IWF’s industry exposure, risk metrics, fund composition and examine how these affect their overall returns.
Summary QQQ vs IWF
IWF vs QQQ Table
|Name||Investco QQQ Trust||iShares Russell 1000 Growth ETF|
|Category||Large Growth||Large Growth|
The Investco QQQ Trust (QQQ) is a NASDAQ-100 Index fund that is issued by Invesco. It currently has $202.156B total assets under management and has yielded an average annual return of 17.40% over the past 10 years. The fund has a dividend yield of 0.58% with an expense ratio of 0.20%.
The iShares Russell 1000 Growth ETF (IWF) is a Russell 1000 Growth Index that is issued by iShares. It currently has $66.29B total assets under management and has yielded an average annual return of 14.71% over the past 10 years. The fund has a dividend yield of 0.80% with an expense ratio of 0.18%.
QQQ’s dividend yield is Lower than that of IWF (0.58% vs 0.80%). Also, QQQ yielded on average 2.69% Higher per year over the past decade (17.40% vs 14.71%). The expense ratio of QQQ is 0.02% percentage points Higher than IWF’s (0.20% vs 0.18%).
Fund Composition QQQ vs IWF
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Industry Exposure Table vs QQQ
The Investco QQQ Trust (QQQ) has the most exposure to the Technology sector at 51.11%. This is followed by Communication Services and Consumer Cyclical at 16.53% and 15.18% respectively. Basic Materials (0.25%), Real Estate (0.37%), and Energy (0.50%) only make up 1.12% of the fund’s total assets.
QQQ’s middle weighted sectors is made up with moderate exposure to Financial Services, Utilities, Industrials, Consumer Defensive, and Healthcare stocks at 0.98%, 1.71%, 3.90%, 5.16%, and 5.86%.
The iShares Russell 1000 Growth ETF (IWF) has the most exposure to the Technology sector at 0.4486. This is followed by Consumer Cyclical and Healthcare at 0.141 and 0.1102 respectively. Utilities (0.0105), Basic Materials (0.0121), and Energy (0.0131) only make up 0.0357 of the fund’s total assets.
IWF’s middle weighted sectors is made up with moderate exposure to Real Estate, Consumer Defensive, Financial Services, Industrials, and Communication Services stocks at 0.0155, 0.0551, 0.0601, 5.16%, and 5.86%.
QQQ is 6.25% More exposed to the Technology sector than IWF (51.11% vs 44.86%). QQQ’s exposure to Communication Services and Consumer Cyclical stocks is 8.80% More and 1.08% More respectively (16.53% vs. 7.73%) and (15.18% vs. 14.10%).
In total, QQQ’s bottom three industries, Energy, Real Estate, and Basic Materials also make up -2.45% Lower of the fund’s holdings compared to IWF’s bottom three industries. (1.12% vs. 0.0357).
Holdings Investco QQQ Trust (QQQ)
|Meta Platforms Inc Class A||4.20%|
|Alphabet Inc Class A||3.75%|
|Alphabet Inc Class C||3.66%|
QQQ’s Top Holdings are Microsoft Corp, Apple Inc, Amazon.com Inc, NVIDIA Corp, and Tesla Inc at 12.89%, 12.46%, 6.82%, 6.80%, and 4.24%.
Meta Platforms Inc Class A (4.20%), Alphabet Inc Class A (3.75%), and Alphabet Inc Class C (3.66%) have a slightly smaller but still significant weight. Broadcom Inc and PepsiCo Inc are also represented in the QQQ’s holdings at 2.42% and 1.71%.
Holdings iShares Russell 1000 Growth ETF (IWF)
|Alphabet Inc Class A||0.0313|
|Alphabet Inc Class C||0.0273|
|UnitedHealth Group Inc||0.0202|
|Visa Inc Class A||0.0175|
QQQ’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, NVIDIA Corp, and Alphabet Inc Class A at 0.1295, 0.1195, 0.0521, 0.0435, and 0.0313.
Alphabet Inc Class C (0.0273), Tesla Inc (0.0256), and UnitedHealth Group Inc (0.0202) have a slightly smaller but still significant weight. Visa Inc Class A and Broadcom Inc are also represented in the ’s holdings at 0.0175 and 0.0155.
Risk Analysis QQQ vs IWF
The Investco QQQ Trust has a Standard Deviation of 23.47 with a Alpha of -1.12 and a Treynor Ratio of 11.31. Its Sharpe Ratio is 0.65 while QQQ’s Beta is 1.19. Furthermore, the fund has a Mean Return of 1.4 and a R-squared of 84.91.
The IWF has a R-squared of 90.02 with a Mean Return of 1.19 and a Standard Deviation of 21.53. Its Sharpe Ratio is 0.59 while IWF’s Alpha is -1.251. Furthermore, the fund has a Beta of 1.14 and a Treynor Ratio of 9.84.
Performance QQQ vs IWF
Annual Returns QQQ vs IWF
QQQ had its best year in 2020 with an annual return of 48.62%. QQQ’s worst year over the past decade yielded -32.58% and occurred in 2022. In most years the Investco QQQ Trust provided moderate returns such as in 2019, 2013, and 2017 where annual returns amounted to 31.35%, 32.39%, and 21.77% respectively.
The year 2020 was the strongest year for IWF, returning 0.3825 on an annual basis. The poorest year for IWF in the last ten years was 2022, with a yield of -0.2931. Most years the iShares Russell 1000 Growth ETF has given investors modest returns, such as in 2019, 2013, and 2017, when gains were 27.32%, 37.70%, and 16.26% respectively.
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Performance Comparison QQQ vs IWF
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in QQQ would have resulted in a final balance of $38,627.90. This is a profit of $28,627.90 over 10 years and amounts to a compound annual growth rate (CAGR) of 16.20%.
With a $10,000 investment in IWF, the end total would have been $34,634.16. This equates to a $24,634.16 profit over 10 years and a compound annual growth rate (CAGR) of 14.80%.
IWF’s CAGR is -1.40% Lower than that of QQQ and as a result, would have yielded -$3,993.74 Less on a $10,000 investment. Thus, IWF Underperformed QQQ by -$399.37 annually.