The Vanguard Growth ETF (VUG 1.77%) and Invesco QQQ Trust, Series 1 (QQQ 1.72%) both target U.S. large-cap growth stocks, but QQQ is more expensive and concentrated, while VUG offers broader diversification at a lower fee.
Both funds are popular choices for large-cap growth exposure, with VUG tracking the CRSP U.S. Large Cap Growth Index and QQQ mirroring the NASDAQ-100 Index. Each leans heavily into technology and consumer-facing giants, but their differences in cost, holdings count, and performance may appeal to different types of investors.
Snapshot (cost & size)
| Metric | VUG | QQQ |
|---|---|---|
| Issuer | Vanguard | Invesco |
| Expense ratio | 0.04% | 0.20% |
| 1-yr return (as of Dec. 12, 2025) | 14.4% | 16.6% |
| Dividend yield | 0.42% | 0.46% |
| Beta (5Y monthly) | 1.23 | 1.19 |
| AUM | $353 billion | $403 billion |
Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.
VUG is markedly more affordable with a 0.04% expense ratio, compared to QQQ’s 0.20% fee. QQQ offers a slightly higher dividend yield at 0.46%, but the difference is minimal and unlikely to drive most decisions between these two funds.
Performance & risk comparison
| Metric | VUG | QQQ |
|---|---|---|
| Max drawdown (5 y) | -35.61% | -35.12% |
| Growth of $1,000 over 5 years | $1,984 | $2,033 |
What's inside
QQQ tracks the NASDAQ-100 Index, holding 101 stocks with a sector allocation of 55% technology, 17% communication services, and 13% consumer cyclical, as of December 2025.
Its top holdings are Nvidia, making up 9.09% of the fund's total assets, Apple at 8.75%, and Microsoft at 7.73%. The fund has a long operating history of nearly 27 years, making it one of the most established growth ETFs on the market.
VUG, by contrast, splits its portfolio across 160 stocks, with a similar sector tilt: 53% technology, 14% communication services, and 14% consumer cyclical. Its largest positions mirror QQQ's, but the holdings make up a slightly larger portion of the fund's total assets. Launched in 2004, it has a long track record but not quite as extensive as QQQ.
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What this means for investors
QQQ and VUG are similar in many ways. They're both popular and established large-cap growth ETFs with a tilt toward technology, and they contain the same top holdings. While QQQ has a slight edge with its one- and five-year total returns, the difference is minimal.
There are two main factors differentiating these two ETFs: fees and diversification.
QQQ has a much higher expense ratio, at 0.20% compared to VUG's 0.04%. In other words, investors can expect to pay either $20 or $4, respectively, per year in fees for every $10,000 invested.
That may seem insignificant, but it can potentially add up to thousands of dollars for long-term investors and those with large account balances.
Also, VUG contains nearly 60 more stocks than QQQ, and that increased diversification can be both an asset and a risk. A greater number of stocks can sometimes help reduce volatility during periods of instability; however, there's also a greater chance that lower-performing stocks will drag down the fund's total returns.
Over the last five years, the two ETFs have seen roughly the same earnings. Where you choose to buy, then, will depend mostly on how much diversification you're seeking as well as how much you're willing to pay in fees.
Glossary
ETF: Exchange-traded fund; a basket of securities traded on an exchange like a stock.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges its investors.
Dividend yield: The annual dividends paid by a fund divided by its share price, shown as a percentage.
Beta: A measure of an investment's volatility compared to the overall market, typically the S&P 500.
AUM: Assets under management; the total market value of assets a fund manages on behalf of investors.
Max drawdown: The largest percentage drop from a fund's peak value to its lowest point over a specific period.
Sector allocation: The distribution of a fund's investments across different industry sectors.
Index tracking: When a fund aims to replicate the performance of a specific market index.
Large-cap: Refers to companies with large market capitalizations, typically over $10 billion.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
Concentration: The degree to which a fund's assets are invested in a small number of holdings.
Growth stocks: Shares in companies expected to grow earnings faster than the market average.
