IVV vs QQQ: Side-by-Side ETF Comparison

IVV vs QQQ boils down to broad market exposure versus tech concentration - IVV spreads your money across the entire S&P 500 with a rock-bottom 0.03% expense ratio, while QQQ's NASDAQ-100 focus delivered stronger 17.5% returns but charges 0.20% annually. The trade-off: QQQ's 51% tech weighting offers more growth potential, IVV's diversified approach provides steadier large-cap coverage.

Table of Content

• Annual & Cumulative Returns
• Risk Metrics
• Dividend Yield & Growth
• Fees & Liquidity
• ETF Composition: Asset Classes
• Regional Allocation
• Sector Weights
• Top 10 Holdings
• Valuation & Growth Metrics
• Which ETF Fits Your Portfolio?

ETF Issuers & Investment Objective

IVV comes from iShares, the ETF arm of BlackRock, and tracks the S&P 500 - meaning you get exposure to 500 of America's largest companies across every sector. The fund keeps costs razor-thin at 0.03% annually while casting a wide net, with technology making up 34% of holdings and no single sector dominating beyond that. It's the plain-vanilla approach to owning large U.S. companies, whether they're growing quickly or just plodding along.

QQQ takes a different path. Invesco's fund follows the NASDAQ-100, which naturally tilts toward growth companies since the exchange attracts more tech and biotech firms. The result is a portfolio that's 51% technology - nearly double IVV's weighting - plus another 16% in communication services giants like Meta and Alphabet. You'll pay 0.20% for this concentration, about six times IVV's fee, but you're betting on faster-growing companies rather than the entire market.

Annual & Cumulative Returns

QQQ's tech-heavy portfolio has delivered noticeably higher returns across every major timeframe, though the margin varies significantly. The three-year gap stands out most - QQQ's 29.94% annualized return versus IVV's 21.52% represents nearly 8.5 percentage points of annual outperformance. Even during the more challenging recent period, QQQ maintained its edge with a 17.5% one-year return compared to IVV's 14.43%.

The performance spread tightens considerably over longer periods, suggesting QQQ's tech concentration works better in certain market environments. While QQQ's 20.51% ten-year annualized return beats IVV's 15.69%, the five-year numbers tell a different story - QQQ's 14.54% barely edges out IVV's 14.11%. This pattern reflects how QQQ's 51% technology weighting can either turbocharge returns or create headwinds, depending on whether tech stocks are in or out of favor.

Risk Metrics

QQQ's tech-heavy portfolio comes with noticeably more bumps - its 15.6% volatility over both one and three years shows investors should expect about 40% more price swings than IVV. The broader S&P 500 holdings in IVV smooth things out at 11% volatility, though this still means meaningful price movement in any given year.

What makes QQQ interesting is how it's compensated investors for that extra volatility. The Sharpe ratio of 1.61 versus IVV's 1.4 suggests the additional tech exposure has delivered better risk-adjusted returns over three years. This isn't guaranteed to continue - tech's dominance could fade or face regulatory pressure - but it shows why many investors accept QQQ's rockier ride for potentially higher returns.

Dividend Yield & Growth

IVV delivers more than double the dividend income of QQQ, paying 1.17% versus 0.46%. That 71 basis point gap reflects the underlying indexes: the S&P 500 includes mature cash cows like JPMorgan and Exxon that return profits to shareholders, while the NASDAQ-100 skews toward tech giants such as Apple and Microsoft that prefer buybacks over payouts. Both funds distribute dividends quarterly, so the difference is purely in the dollar amount hitting your account.

The trade-off becomes clearer when you look at total returns. QQQ's 17.5% one-year gain beat IVV's 14.43% by over three percentage points, which more than compensated for the lower yield. Growth investors often accept skimpy dividends when earnings are reinvested at high rates, and QQQ's tech-heavy portfolio has delivered on that premise. Income-focused investors might prefer IVV's steadier cash flow, but they'll sacrifice some upside potential.

Fees & Liquidity

The fee gap between these two is hard to ignore. IVV charges 0.03%, which means you pay about three cents a year for every hundred dollars invested. QQQ’s 0.20% sounds tiny too, but it’s actually more than six times higher. On a $50,000 position, that’s roughly $15 versus $100 annually a difference that compounds quietly in the background.

Liquidity isn’t a worry for either fund. Both trade millions of shares daily with razor-thin bid-ask spreads, so you can move in or out without the market nickeling-and-diming you. Still, if you’re the kind of investor who automatically reinvests dividends every quarter or adds small monthly slices, the lower expense drag from IVV keeps more of each dollar working for you.

ETF Composition: Asset Classes

Both ETFs stick almost entirely to U.S. equities, but IVV is the purer play: 99.2% of its assets are domestic stocks, leaving only half a percent overseas and a sliver in cash. QQQ keeps 96.3% at home, so its 3.6% non-U.S. weight is seven times larger. That modest foreign tilt won’t turn QQQ into a global fund, yet it does leave the door open to the handful of international names that list on Nasdaq.

The cash differences are even smaller IVV holds 0.27% versus QQQ’s 0.07% so neither fund drags significant idle money. Still, the tighter allocation inside QQQ matches its tech-heavy, growth-oriented posture: everything is deployed, with just enough foreign exposure to catch the overseas ADRs that qualify for the Nasdaq-100. IVV’s extra basis points in cash and foreign stocks simply reflect the broader S&P 500’s wider membership criteria, not a tactical bet.

Regional Allocation

Both funds tilt heavily toward North America, but IVV hugs the continent tighter, with 99.5% of its holdings domiciled there versus 97.6% for QQQ. The difference looks small on paper, yet it matters: that extra two-percentage-point cushion in IVV means even less currency risk and virtually no direct exposure to overseas earnings surprises. QQQ's larger 2.4% allocation outside the U.S. is still tiny, yet it's seven times the foreign slice found in IVV and includes a 0.6% sliver in Latin America that IVV simply doesn't touch.

For investors who view the S&P 500 as "close enough" to a pure U.S. bet, IVV delivers with only 0.5% scattered across the U.K., developed Europe, and emerging Asia. QQQ's 1.2% developed Europe weight and 0.4% combined emerging-markets stake won't move the needle in a bull run, yet they can add a touch of volatility when the dollar surges or when regional headlines flare. Bottom line: if you're benchmarking against the domestic economy, either fund keeps the action at home, but IVV leaves even less room for overseas noise.

Sector Weights

QQQ's technology allocation dwarfs everything else at 51% - that's half the fund riding on one sector. IVV spreads the risk thinner with tech at 34%, still hefty but not overwhelming. The gap widens further when you add communication services (think Meta, Alphabet) to the tech story: together they make up 68% of QQQ versus 45% of IVV.

The flip side shows QQQ barely touches financials at 0.3% and energy at 0.5%, while IVV gives them 12.6% and 3.1% respectively. Healthcare gets shortchanged too - 5% in QQQ versus nearly 10% in IVV. This concentration explains why QQQ's returns swing harder: when tech rallies, it soars. When tech stumbles, there's little else to cushion the fall. IVV's broader mix means fewer sleepless nights when one sector hits turbulence.

Top 10 Holdings

Both ETFs share the same three tech giants at the top - NVIDIA, Apple, and Microsoft - but QQQ gives them more room to run. The Invesco fund allocates 8.62% to NVIDIA versus 7.59% in IVV, and the gap widens through the rest of the top five. Amazon and Alphabet together claim 7.1% of IVV; QQQ replaces Alphabet with Tesla and still manages 8.63% for Amazon alone. These weighting differences explain why QQQ's technology allocation hits 51% while IVV stops at 34%.

The concentration story matters more than the individual names. QQQ's top five holdings swallow 30.73% of the portfolio, leaving less room for the other 95 stocks that make up the NASDAQ-100. IVV spreads its bets wider - the same five companies take only 26.56% despite tracking 500 stocks. For investors, this means QQQ's returns live and die by how these mega-caps perform, while IVV offers a slightly smoother ride when tech stumbles. Neither approach is inherently better, but the 4-percentage-point gap in top-five weighting can swing performance significantly in any given year.

Valuation & Growth Metrics

QQQ trades at a 25.1× multiple, about 12% richer than IVV’s 22.3×, and the gap widens on book value: QQQ’s 6.4× is 41% above IVV’s 4.5×. That premium is the market’s way of saying the Nasdaq-100’s asset-light giants Apple, Microsoft, Nvidia are expected to keep squeezing more profit out of every dollar of shareholder equity. Whether the extra cost is justified depends on how much faith you place in those expectations.

Historical growth backs some of that optimism: QQQ’s earnings have compounded at 15.8% a year versus IVV’s 10.3%, and forward-looking estimates show the same three-point edge (10.8% vs 10.5%). In short, you’re paying noticeably more for a modestly faster trajectory. If tech’s pricing power fades, IVV’s broader, cheaper mix should cushion the fall; if the megacaps keep delivering, QQQ’s loftier valuations may not matter.

Which ETF Fits Your Portfolio?

IVV gives you the whole market at a rock-bottom 0.03% fee and a 1.17% yield, while QQQ bets almost everything on tech 51% of the portfolio and charges 0.20% for the privilege. Last year that tilt paid off: QQQ returned 17.5% versus IVV’s 14.4%, but the Nasdaq basket also trades at 25× earnings, three points pricier than the S&P 500. If you want cheap, diversified exposure with a little income, IVV does the job. If you’re comfortable paying more and accepting a narrower slice in exchange for the possibility of extra growth, QQQ is the simpler play.

If you want to have look at other ETF comparisons, check out this: Fund Overlap Tool

Data sources: The data has been obtained from the ETF provider's website and ETF fact sheet.