Invesco QQQ Trust, Series 1 (QQQ +1.30%) and the SPDR S&P 500 ETF Trust (SPY +0.84%) are two of the most widely traded exchange-traded funds in the U.S., each tracking a different major index.
QQQ focuses on the NASDAQ-100, which skews toward technology and growth companies, while SPY mirrors the S&P 500, offering exposure to all eleven sectors. Here is how they stack up on cost, returns, and risk.
Snapshot (cost & size)
| Metric | QQQ | SPY |
|---|---|---|
| Issuer | Invesco | SPDR |
| Expense ratio | 0.20% | 0.09% |
| 1-yr return (as of Dec. 20, 2025) | 18.97% | 15.13% |
| Dividend yield | 0.46% | 1.06% |
| Beta (5Y monthly) | 1.19 | 1.00 |
| AUM | $403 billion | $701 billion |
Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.
SPY is more affordable due to its lower expense ratio, and it also offers a higher dividend yield than QQQ -- which may appeal to cost-conscious or income-seeking investors.
Performance & risk comparison
| Metric | QQQ | SPY |
|---|---|---|
| Max drawdown (5 y) | -35.12% | -24.50% |
| Growth of $1,000 over 5 years | $1,990 | $1,844 |
What's inside
SPY tracks the S&P 500 Index, holding 503 companies across all major sectors, with a notable tilt toward technology (35%), financial services (14%), and consumer discretionary (11%).
Its largest positions are Nvidia, Microsoft, and Apple, and the fund has been operating for nearly 33 years -- making it the oldest U.S. ETF in existence. With no leverage, currency hedging, or other structural quirks, SPY is widely used for broad-market exposure.
QQQ, in contrast, tracks the NASDAQ-100 and is more concentrated in technology (55%), communication services (17%), and consumer cyclical (13%). Its top holdings match SPY's, but each stock makes up a larger portion of the portfolio. QQQ holds 101 stocks, offering a more growth-focused profile with less sector diversification than SPY.
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What this means for investors
SPY and QQQ are fantastic investments in their own right, but the one that better fits your needs will depend on your goals.
SPY shines with its broad-market diversification, tracking the entire S&P 500 and including hundreds of stocks from the largest U.S. companies. While it does have a tilt toward the tech industry, it's not as heavy as QQQ's -- which can help limit the impact of tech stocks' inherent volatility.
This ETF also offers a higher dividend yield and a lower expense ratio than QQQ, meaning investors can earn more in passive dividend income while paying less in annual fees. For long-term investors seeking to maximize income and minimize costs, this can be a significant advantage.
The downside to SPY, however, is its lower returns. This fund aims to follow the market, making it impossible for it to earn above-average returns. QQQ, though, is designed to beat the market over time.
QQQ has outperformed SPY in both 12-month and five-year total returns, primarily due to its significant tech exposure. It's also more heavily weighted toward its top three earnings. Nvidia, Microsoft, and Apple make up 25.57% of QQQ's total assets, compared to 20.70% for SPY. When these particular stocks are thriving, it can result in higher earnings for QQQ.
However, QQQ's greater volatility can be a risk to consider. With both a steeper max drawdown and higher beta than SPY, it's experienced more severe price fluctuations over the past five years. For investors willing to take on more risk for greater earning potential, QQQ could be a good fit. Those looking for a more stable and diversified ETF, though, may prefer SPY.
Glossary
Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover operating costs.
Dividend yield: The annual dividends paid by a fund, expressed as a percentage of its current price.
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 all assets managed by a fund.
Max drawdown: The largest percentage drop from a fund's peak value to its lowest point over a specific period.
ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding a basket of assets like stocks or bonds.
Sector diversification: The spread of investments across different industry sectors to reduce risk.
NASDAQ-100: An index of 100 of the largest non-financial companies listed on the NASDAQ stock exchange.
S&P 500: An index tracking the 500 largest publicly traded companies in the U.S., representing the broader market.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
Leverage: The use of borrowed money to increase potential investment returns, often increasing risk.
Currency hedging: Strategies used to reduce the impact of currency fluctuations on investment returns.
