2 Legendary ETFs, Built for Very Different Investors: SPY vs. QQQ
Key Points
QQQ has outpaced SPY over the past year but comes with a higher expense ratio and steeper drawdowns.
QQQ leans more heavily into technology, resulting in greater sector concentration than SPY.
SPY holds a broader mix of U.S. large caps and offers a higher dividend yield.
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The State Street SPDR S&P 500 ETF Trust (NYSEMKT:SPY) and the Invesco QQQ Trust (NASDAQ:QQQ) differ most in sector concentration, cost, and recent returns, with QQQ leaning into tech and SPY offering broader diversification and a higher yield.
Both SPY and QQQ are giants in the exchange-traded fund world, tracking major U.S. equity indices — the S&P 500 and Nasdaq-100, respectively. This comparison looks at how their cost structures, performance, risk profiles, and portfolio makeup stack up for investors seeking exposure to U.S. large-cap stocks.
Snapshot (cost & size)
| Metric | SPY | QQQ |
|---|---|---|
| Issuer | SPDR | Invesco |
| Expense ratio | 0.09% | 0.18% |
| 1-yr return (as of 2026-04-16) | 35.0% | 44.9% |
| Dividend yield | 1.1% | 0.5% |
| Beta | 1.00 | 1.11 |
| AUM | $651.6 billion | $372.5 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.
SPY is more affordable on annual fees, charging half the expense ratio of QQQ, while also offering a higher dividend yield. QQQ, though pricier, has delivered stronger recent returns but pays out less in dividends.
Performance & risk comparison
| Metric | SPY | QQQ |
|---|---|---|
| Max drawdown (5 y) | -24.50% | -35.12% |
| Growth of $1,000 over 5 years | $1,809 | $1,947 |
What's inside
QQQ tracks the Nasdaq-100, which is tilted toward technology (50%) and communication services (16%), with just over 100 holdings. Its top positions are Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT), making up a significant chunk of assets. With a fund age of over 27 years, QQQ is a seasoned option for investors seeking concentrated exposure to the largest non-financial Nasdaq-listed companies.
SPY, by contrast, tracks the S&P 500 and holds over 500 companies, spreading risk across technology (34%), financial services (12%), and communication services (10%). Its top three holdings — Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT) — overlap with QQQ but represent a smaller portion of the portfolio, reflecting broader diversification. Both funds are free of leverage, currency hedging, or other structural quirks.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
SPY and QQQ are not just popular ETFs, they are two of the most traded, most widely held, and most closely watched financial products on earth. SPY launched in 1993 as the first U.S.-listed ETF and now holds roughly $650 billion in assets. QQQ followed in 1999 and manages around $375 billion. Between them they have shaped how millions of investors think about index investing.
But owning them is not the same experience. SPY tracks the S&P 500, spreading exposure across more than 500 companies and every major sector of the U.S. economy. QQQ tracks the Nasdaq-100, concentrating roughly 50% of its portfolio in technology alone. The same top names — Nvidia, Apple, Microsoft — appear in both funds, but they carry far more weight in QQQ.
That distinction defines the trade-off. SPY is a bet on the breadth of American business. QQQ is a bet that technology continues to lead it. Both have rewarded long-term investors handsomely, but QQQ's heavier tech concentration means steeper drops when the sector falls out of favor, as it did sharply in 2022.
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Sara Appino has positions in Apple and Nvidia. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia and is short shares of Apple. The Motley Fool has a disclosure policy.
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