QQQ vs SPY: Side-by-Side ETF Comparison
Choosing between QQQ and SPY hinges on your appetite for growth versus diversification. Our head-to-head breakdown of returns, risk, fees, dividends and sector tilts reveals why QQQ shines in tech-driven rallies, while SPY delivers steadier, low-cost exposure to the full S&P 500.
QQQ vs SPY comes down to growth vs diversification. QQQ offers higher long-term returns by focusing heavily on tech and innovation, but with greater volatility and lower dividend yield. SPY provides broader sector exposure, lower fees, and more stability. Choose QQQ if you're aiming for aggressive growth, or SPY if you want balanced exposure to the entire S&P 500.
Table of Content
ETF Issuers & Investment Objective
When weighing QQQ against SPY, start with the firms that created them Invesco and State Street Global Advisors (SSGA) two pioneers that helped popularize the modern ETF.
Invesco QQQ Trust (QQQ)
Launched in March 1999 under the PowerShares banner (now Invesco), QQQ was designed to capture the explosive growth of the Nasdaq-100 Index. The fund seeks to replicate, before fees, the price and yield of the 100 largest non-financial companies listed on the Nasdaq Exchange an index dominated by technology, communication-services, and consumer-cyclical innovators. Invesco markets QQQ as a pure-play on American ingenuity, offering investors high liquidity and transparent, rules-based exposure to mega-cap growth leaders.
SPDR S&P 500 ETF Trust (SPY)
Introduced in January 1993 by SSGA, SPY is the oldest and most heavily traded ETF in the world. Its objective is straightforward: track the S&P 500 Index, the flagship barometer of U.S. large-cap equities, by holding each company in index weight. As a unit-investment trust, SPY cannot reinvest dividends intraday or lend securities, yet it remains a benchmark trading vehicle for institutions and retail investors seeking instant, deep-liquidity exposure to the broad U.S. market.
Although both ETFs offer blue-chip U.S. equity exposure, their issuer philosophies and index mandates diverge sharply. QQQ concentrates on tech-driven growth, while SPY provides sector-balanced core market exposure giving investors two distinct tools for building or fine-tuning a portfolio.
Annual & Cumulative Returns
| Period | QQQ | SPY | Difference |
|---|---|---|---|
| YTD (2025) | +2.26% | +1.80% | +0.46% |
| 1-Year | +16.25% | +13.78% | +2.47% |
| 3-Year Returns | +22.53% | +16.87% | +5.66% |
| 5-Year Returns | +18.88% | +17.00% | +1.88% |
| 10-Year Returns | +17.77% | +12.76% | +5.01% |
QQQ consistently outperforms SPY across all timeframes, especially over longer horizons like 10 years, where the difference exceeds 5%. This return premium stems from QQQ's heavy concentration in high-growth tech companies such as Apple, Nvidia, and Microsoft. In contrast, SPY mirrors the broader S&P 500, including slower-growth sectors like financials and utilities. The tech dominance in QQQ naturally drives higher returns in bullish market environments
Risk Metrics
| Metric | QQQ | SPY |
| 1-Year Volatility | 13.91% | 11.42% |
| 3-Year Volatility | 20.13% | 16.35% |
| 3-Year Sharpe Ratio | 0.60 | 0.50 |
With greater return potential comes greater volatility, QQQ shows a significantly higher 1-year and 3-year volatility compared to SPY. This increased risk is a result of QQQ’s sector tilt toward technology and growth stocks, which tend to react more sharply to economic shifts. Interestingly, QQQ's Sharpe ratio is still higher, indicating better risk-adjusted performance over the past three years.
Explanation:
- Volatility reflects how much the price moves over time higher volatility means more frequent or larger price swings.
- Sharpe Ratio measures risk-adjusted returns: how much return you get for each unit of risk. Higher is better.
Dividend Yield & Growth
| Metric | QQQ | SPY |
| Dividend Yield | ~0.91% | ~1.50% |
| Frequency | Quarterly | Quarterly |
When it comes to dividends, SPY is the clear winner. SPY’s yield is notably higher at ~1.50% compared to QQQ’s sub-1% level. That’s expected, since QQQ focuses on capital appreciation via tech giants, many of which reinvest earnings rather than paying them out. SPY, which includes mature dividend-paying sectors like healthcare and financials, is more appealing for income-focused investors.
Explanation:
- Dividend Yield is the percentage of the fund's current price that is paid out annually as dividends.
Fees & Liquidity
| Metric | QQQ | SPY |
| Expense Ratio | 0.20% | 0.095% |
| Avg. Bid-Ask Spread | ~0.02% | ~0.01% |
| Avg. Daily Volume | Very High | Extremely High |
SPY holds an edge in cost efficiency with an ultra-low 0.095% expense ratio, while QQQ’s 0.20% is more than double. Both ETFs offer tight bid-ask spreads and massive daily volume, ensuring high liquidity for traders and long-term investors alike. That said, cost-sensitive investors may find SPY’s lower expense ratio meaningful over time.
Explanation:
- Expense Ratio is the annual fee taken by the fund manager, expressed as a % of your investment.
- Bid-Ask Spread is the difference between the buying and selling price. Smaller spreads mean lower transaction costs.
ETF Composition: Asset Classes
| Asset Class | QQQ (%) | SPY (%) |
| US Stocks | 97.35 | 99.37 |
| Non-US Stocks | 2.57 | 0.52 |
| Cash | 0.08 | 0.11 |
| Bonds/Other | 0.00 | 0.00 |
Both ETFs invest almost entirely in U.S. equities, but QQQ carries a slightly higher allocation to non-U.S. stocks at 2.57%, possibly due to the global footprint of its tech-heavy holdings. SPY is more strictly domestic. Neither fund includes bonds, underscoring their full equity exposure suitable for investors seeking growth over stability.
Regional Allocation
| Region | QQQ (%) | SPY (%) |
| North America | 97.43 | 99.48 |
| Europe Developed | 0.76 | 0.43 |
| United Kingdom | 0.50 | 0.04 |
| Other | <0.10 | <0.10 |
SPY is almost fully concentrated in North America, while QQQ has slightly more geographic diversification, albeit still minimal. QQQ’s marginally higher exposure to Europe and emerging markets reflects the international revenue exposure of large-cap tech firms rather than actual non-U.S. listings. For globally-minded investors, however, the difference is negligible.
Sector Weights
| Sector | QQQ (%) | SPY (%) |
| Technology | 52.46 | 33.10 |
| Financial Services | 0.45 | 13.91 |
| Consumer Cyclical | 13.63 | 10.78 |
| Healthcare | 5.11 | 9.59 |
| Communication Services | 15.59 | 9.55 |
| Industrials | 3.67 | 7.84 |
| Consumer Defensive | 5.62 | 5.77 |
| Others (Basic Materials, Real Estate, Energy, Utilities) | ~3.48 | ~9.46 |
Sector weighting reveals the most striking contrast between the two ETFs. QQQ allocates over 52% to technology compared to just 33% in SPY, while drastically underweighting sectors like financials, energy, and industrials. SPY’s more balanced sector exposure reflects its S&P 500 benchmark, while QQQ leans aggressively into innovation-driven areas that thrive on rapid growth.
Top 10 Holdings
| Company | QQQ (%) | SPY (%) |
| Microsoft | 8.57 | 6.68 |
| NVIDIA | 8.37 | 6.56 |
| Apple | 8.08 | 6.28 |
| Amazon | 5.53 | 3.83 |
| Broadcom | 4.59 | 2.12 |
| Meta Platforms | 3.59 | 2.77 |
| Tesla | 3.17 | 1.94 |
| Netflix | 3.15 | – |
| Costco Wholesale | 2.81 | – |
| Alphabet Inc. Class A | 2.43 | 1.92 |
| Berkshire Hathaway Class B | – | 1.86 |
| Alphabet Inc. Class C | – | 1.57 |
QQQ is top-heavy with exposure to mega-cap tech names, including Microsoft, Nvidia, and Apple, each commanding over 8% of the fund. SPY, while also tech-focused at the top, distributes weights more evenly and includes names like Berkshire Hathaway and Alphabet Class C, which are absent in QQQ. Investors in QQQ take on higher concentration risk, but potentially higher reward as well.
Valuation & Growth Metrics
Valuation Ratios
| Metric | QQQ | SPY |
| P/E Ratio (Forward) | 25.08 | 21.09 |
| Price/Book | 6.27 | 4.09 |
| Price/Sales | 4.84 | 2.77 |
| Price/Cash Flow | 16.61 | 13.83 |
| Dividend Yield | ~0.91% | ~1.50% |
Unsurprisingly, QQQ trades at a premium across all valuation multiples P/E, Price/Sales, and Price/Book. Investors are paying more for each dollar of earnings or revenue, pricing in high expectations for continued growth. SPY, by contrast, offers a more balanced valuation profile, reflecting its mix of growth and value sectors.
Explanation:
- P/E Ratio = Price divided by earnings. Indicates how expensive a fund is relative to profits.
- Price/Book = Price vs book value (assets minus liabilities).
- Price/Sales = Price relative to total revenue.
- Price/Cash Flow = Price relative to how much cash the companies generate.
Growth Expectations
| Metric | QQQ | SPY |
| Long-Term Earnings Growth | 8.77% | 9.92% |
| Historical Earnings Growth | 13.77% | 9.31% |
| Sales Growth | 8.78% | 7.90% |
| Cash-Flow Growth | 12.57% | 6.88% |
| Book Value Growth | 11.03% | 8.64% |
QQQ shows superior historical growth in earnings, sales, and cash flow compared to SPY. However, SPY edges out in projected long-term earnings growth. This may seem counterintuitive but could reflect mean-reversion expectations or valuation concerns among analysts. Overall, QQQ’s past performance reflects its aggressive growth orientation, while SPY appears more stable yet still competitive.
Which ETF Fits Your Portfolio - QQQ vs SPY?
| Choose QQQ if… | Choose SPY if… |
|---|---|
| You’re chasing growth. QQQ’s tech-heavy lineup has historically outpaced the S&P 500, rewarding investors who can handle bumps along the way. | You prefer balance. SPY mirrors the entire S&P 500, giving you everything from cutting-edge tech to steady utilities in one low-cost wrapper. |
| Volatility doesn’t scare you. Bigger swings are the price of higher return potential; a long time horizon helps smooth them out. | Stability matters more than outperformance. Lower volatility and a higher dividend yield can make SPY easier to stick with through market cycles. |
| Capital appreciation trumps income. A sub-1 % yield is fine because your main goal is share-price growth. | You want dependable dividends. SPY’s ~1.5 % yield and diversified payout sources suit income-minded investors. |
| Sector concentration is a feature, not a bug. Being 50 %+ in technology is acceptable—or even desirable—to capture innovation trends. | You’d rather spread sector risk. No single sector dominates SPY, reducing the impact of a tech sell-off on your portfolio. |
| You don’t mind a higher fee. At 0.20 %, QQQ costs more than twice SPY, but you believe the performance edge justifies it. | Cost is king. SPY’s rock-bottom 0.095 % expense ratio keeps more of every dollar working for you. |
Bottom line
Aggressive growth seekers who can stomach short-term swings should lean toward QQQ.
Broad-market investors looking for a one-ticket core holding with lower fees, steadier dividends, and smoother rides will likely favor SPY.
Whichever route you pick, staying invested and periodically rebalancing will matter far more than trying to time the perfect ETF.