Nasdaq's Elite or S&P's Full Roster? Breaking Down QQQ vs. RSP

The Invesco QQQ Trust, Series 1 (NASDAQ:QQQ) and Invesco S&P 500 Equal Weight ETF (NYSEMKT:RSP) stand apart on sector exposure, diversification, and yield, while both maintain massive assets and nearly identical expense ratios.

Both QQQ and RSP are flagship exchange-traded funds (ETFs) managed by Invesco, but they take very different approaches: QQQ concentrates on the largest Nasdaq-listed companies with a tech tilt, while RSP holds all S&P 500 members in equal weights. This comparison highlights their key differences in cost, returns, risk, and portfolio construction.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.

Both funds are low cost, but RSP charges a slightly higher expense ratio and delivers a notably higher dividend yield, which may appeal to income-focused investors. The difference in annual fees is marginal, but the yield gap is substantial.

Performance & risk comparison

What's inside

RSP tracks the S&P 500 Equal Weight Index by holding roughly 505 stocks, rebalancing regularly to ensure each has similar portfolio weight. Its sector exposure is broad—Technology, Industrials, and Financial Services each represent 14%-16% of assets. No single stock dominates, with Sandisk (NASDAQ:SNDK), Norwegian Cruise Line (NYSE:NCLH), and Micron Technology (NASDAQ:MU) each at less than 0.3%. This approach spreads risk more evenly and the fund has a long history, with nearly 23 years since launch.

QQQ, by contrast, is highly concentrated in megacap technology and consumer-facing brands, with Technology alone accounting for over half the portfolio. Top positions include Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT), which together exceed 23% of assets. This tilt has driven recent outperformance, but also amplifies volatility when tech stocks swing.

What this means for investors

Over the past year, QQQ's approximately 24% return outpaced RSP's roughly 14% gain, driven by the tech sector's strong performance. With roughly $412 billion in assets compared to RSP's $78 billion, QQQ commands significantly more capital, reflecting its popularity as a tech-focused growth vehicle. Technology stocks represent over half of QQQ's portfolio, creating concentrated exposure that amplifies both gains and losses. QQQ's holdings include roughly 100 of the largest non-financial companies on the Nasdaq, dominated by names like Apple, Microsoft, and Nvidia.

RSP takes the opposite approach, spreading equal weight across all S&P 500 companies regardless of size. This diversification across 500-plus stocks reduces concentration risk but also means missing out when megacaps surge. Both funds charge similarly low fees and offer ample liquidity for most investors.

QQQ offers higher growth potential as long as you are comfortable with greater volatility and sector concentration. RSP gives you broader diversification and a higher yield, which could suit investors prioritizing income and risk reduction. The choice depends on whether you value recent performance and tech exposure or prefer a more balanced approach across the S&P 500.

Glossary

ETF (Exchange-Traded Fund): A fund holding a basket of assets, traded on an exchange like a stock.
Expense ratio: The annual fee a fund charges investors, expressed as a percentage of invested assets.
Dividend yield: Annual dividends paid by a fund or stock divided by its current price, shown as a percentage.
Beta: A measure of how much an investment’s price moves relative to a benchmark index like the S&P 500.
AUM (Assets Under Management): The total market value of all assets managed within a fund or investment product.
Max drawdown: The largest peak-to-trough decline in an investment’s value over a specific period.
Total return: Investment performance including price changes plus all dividends and distributions, assuming they are reinvested.
Sector exposure: How much of a fund’s assets are invested in specific industries, such as Technology or Financials.
Diversification: Spreading investments across many securities or sectors to reduce the impact of any single holding.
Equal weight index: An index where each constituent stock is assigned the same portfolio weight, regardless of company size.
Rebalancing: Periodically adjusting a portfolio back to target weights by buying or selling holdings.
Volatility: The degree to which an investment’s price fluctuates over time, indicating its risk level.

For more guidance on ETF investing, check out the full guide at this link.

Sara Appino has positions in Apple and Nvidia. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool recommends Micron Technology and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.