SPY vs. QQQ: Which ETF Looks Best for Your Portfolio in 2026?
Key Points
State Street SPDR S&P 500 ETF offers a lower expense ratio and higher trailing-12-month dividend yield than Invesco QQQ.
Invesco's ETF has achieved higher one-year total returns but carries a higher beta and larger maximum drawdown.
The Invesco fund is heavily concentrated in technology, while State Street's ETF provides broader market exposure.
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State Street SPDR S&P 500 ETF Trust (NYSEMKT:SPY) provides broad market exposure with lower fees, whereas Invesco QQQ (NASDAQ:QQQ) offers concentrated growth potential through its heavy tilt toward technology.
Investors often choose between the State Street fund and the Invesco QQQ ETF when building a core portfolio. While SPY tracks the broad-market S&P 500, QQQ follows the technology-centric NASDAQ-100. This choice often involves balancing a preference for wide-reaching diversification against a desire for more aggressive, growth-oriented performance.
Snapshot (cost & size)
| Metric | QQQ | SPY |
|---|---|---|
| Issuer | Invesco | SPDR |
| Expense ratio | 0.18% | 0.095% |
| 1-yr return (as of June 19, 2026) | 40% | 25% |
| Dividend yield | 0.4% | 1% |
| Beta | 1.23 | 1.0 |
| AUM | ~$493.2 billion | ~$765.3 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. Dividend yield is the trailing-12-month distribution yield.
The State Street SPDR S&P 500 ETF Trust is the more affordable option, charging a 0.095% expense ratio. For investors prioritizing income, it also offers a more robust payout with a 1% trailing-12-month dividend yield. In contrast, the Invesco fund charges about twice as much and provides a 0.4% yield, reflecting its emphasis on capital growth over distributions.
Performance & risk comparison
| Metric | QQQ | SPY |
|---|---|---|
| Max drawdown (5 yr) | (35.10%) | (24.50%) |
| Growth of $1,000 over 5 years (total return) | ~$2,173 | ~$1,906 |
What's inside
The State Street ETF holds 504 stocks, providing broad coverage across all 11 industry sectors. Its largest positions include Nvidia (NASDAQ:NVDA) at 7.8%, Apple (NASDAQ:AAPL) at 6.82%, and Microsoft (NASDAQ:MSFT) at 4.41%. Launched in 1993, this fund has a trailing-12-month dividend payout of $7.38 per share. Its sector allocation features technology at 39%, financial services at 11%, and communication services at 11%.
Invesco QQQ is more concentrated, holding 102 stocks. Top holdings include Nvidia at 8.08%, Apple at 7.06%, and Micron Technology (NASDAQ:MU) at 5.27%. Launched in 1999, this fund has a trailing-12-month dividend payout of $2.81 per share. Its sector allocation leans heavily into technology at 59%, communication services at 14%, and consumer cyclical at 11%.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
The most obvious difference between these mega-popular ETFs is their number of holdings. Obviously, State Street's fund has positions in way more companies. But because of the massive growth of a few huge tech names in the S&P 500 over the past several years, the top five holdings in SPY make up about 26% of the portfolio. So it's not as simple as "largely tech ETF vs. an S&P 500 ETF."
QQQ's top 10 holdings make up about 46% of the fund, while SPY's top 10 account for roughly 37%. So even with the big tech stocks dominating the markets the past several years, ultimately SPY offers less concentration risk and increased diversification due to its larger number of holdings.
It's worth noting these ETFs are extremely large, and both have massive average trading volume, so liquidity shouldn't be a concern.
I think both funds are a solid pick, but I do think this is an either/or choice. There's so much overlap between their holdings that to me, it doesn't make a ton of sense to buy both. I'd probably opt for SPY because of its low cost, greater diversification, and slightly higher dividend yield.
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Erin Kennedy has positions in Apple. The Motley Fool has positions in and recommends Apple, Micron Technology, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
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