VTI vs QQQ: Side-by-Side ETF Comparison

VTI vs QQQ boils down to breadth versus concentration: VTI gives you the entire U.S. market for just 0.03% a year, while QQQ charges 0.20% to own the Nasdaq-100's tech-heavy lineup that has returned 17.5% over the past year versus VTI's 14.1%. The trade-off is QQQ's 51% tech weighting and richer 25× P/E compared with VTI's more diversified 33% tech allocation at 21× earnings.

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

Vanguard's VTI casts the widest possible net across American equities, tracking a benchmark that sweeps up everything from Apple down to the tiniest Nasdaq micro-cap. That all-market approach shows up in the sector mix: technology still leads at 33%, yet financial services claim a meaningful 13% and consumer cyclicals another 10%, giving the portfolio a balance rarely found in single-ETF solutions. Invesco's QQQ, by contrast, narrows the field to the hundred largest non-financial names listed on the Nasdaq, a filter that pushes technology's weight past 51% and leaves little room for banks or insurers. The result is a growth-tilted basket whose 25× P/E multiple sits four points above VTI's 21×, reflecting the premium investors pay for today's earnings lightweights like Tesla and Meta.

Fees tell the same story of breadth versus concentration: VTI charges 0.03%, or thirty cents a year on a $1,000 position, while QQQ asks 0.20% - still cheap, but almost seven times higher because the underlying index rebalances more often and the trust structure adds a layer of administrative cost. Dividend income flips the script: VTI's 1.12% yield beats QQQ's 0.46% thanks to its inclusion of dividend-rich utilities, REITs, and value stocks the Nasdaq screen discards. Investors choosing between the two are really deciding whether they want the whole U.S. market or just its fastest-growing, tech-heavy slice, and the cost, valuation, and income numbers spell out that trade-off in plain arithmetic.

Annual & Cumulative Returns

QQQ has delivered stronger absolute returns across every major timeframe except this year, with the gap widening the longer you stay invested. The three-year stretch shows the starkest difference - QQQ's 29.94% annualized return leaves VTI's 20.81% in the dust. Even over a full decade, QQQ's 20.51% annual return beats VTI by more than five percentage points annually. That's the difference between turning $10,000 into roughly $65,000 versus $41,000 over ten years.

But here's what the raw numbers don't show: QQQ's outperformance comes with considerably more tech concentration risk. When tech stumbles, QQQ stumbles harder - the funds posted nearly identical returns during 2022's tech rout. VTI's broader diversification means you're trading some upside for smoother sailing. For investors who can stomach the volatility, QQQ's tech-heavy approach has historically paid off. Those who prefer steadier progress might find VTI's market-wide exposure more suitable, even if it means giving up a few percentage points of annual return.

Risk Metrics

QQQ's 15.6% three-year volatility sits three points above VTI's 12.6%, which means investors stomach about 24% more price swings for the growth-focused fund. That extra turbulence shows up consistently - the one-year gap is even wider at 4.3 percentage points - reflecting how the Nasdaq-100's 51% tech weighting amplifies market moves compared with VTI's broader 33% tech exposure.

The Sharpe ratios tell a more nuanced story. QQQ's 1.61 versus VTI's 1.29 indicates the growth fund delivered roughly 25% more return per unit of risk over three years, essentially paying investors for that extra volatility. This works until it doesn't - tech-heavy portfolios can see Sharpe ratios collapse quickly when growth stocks fall out of favor. Conservative investors might prefer VTI's smoother ride, while those comfortable with sharper ups and downs might find QQQ's risk-adjusted returns acceptable, provided they can handle the inevitable drawdowns.

Dividend Yield & Growth

VTI's 1.12% yield is nearly two-and-a-half times QQQ's 0.46%, which makes sense when you consider what each fund owns. The total-market approach captures banks, utilities, and consumer staples that send regular checks to shareholders, while QQQ's tech-heavy lineup reinvests cash rather than paying it out. Both pay quarterly, so the difference isn't timing - it's the underlying companies' priorities.

For investors who need portfolio income, that 0.66-percentage-point gap matters. On a $100,000 position, VTI throws off about $1,120 annually versus $460 from QQQ. The trade-off? QQQ's 17.5% one-year return beat VTI's 14.07%, so the lower yield comes with higher growth potential. Neither yield will fund a retirement, but VTI gives you more cash now while QQQ bets on bigger gains later.

Fees & Liquidity

The fee gap here is striking. VTI charges just 0.03% annually, meaning you pay $3 on every $10,000 invested. QQQ's 0.20% expense ratio costs $17 more for the same position. That difference compounds quietly; over a decade, a $100,000 holding in QQQ would cost roughly $1,700 more in fees than VTI, assuming identical pre-fee returns. For buy-and-hold investors, this is real money that could otherwise stay invested.

Trading costs tell the opposite story. QQQ's $150 billion in assets and 50 million daily shares make it one of the tightest markets in the ETF universe - spreads often sit at a penny. VTI trades well too, but its broader basket of 4,000 stocks can translate to wider bid-ask spreads, especially in the small-cap names that represent 10% of the portfolio. If you're dollar-cost averaging monthly, VTI's lower fee usually wins. For traders moving size or using options, QQQ's depth and liquidity often justify its higher expense.

ETF Composition: Asset Classes

VTI keeps things almost entirely domestic with 98.8% of its portfolio parked in U.S. equities, leaving just half a percent scattered in non-U.S. names, cash, and miscellaneous holdings. That near-pure exposure to American companies is exactly what you'd expect from a fund that tries to own "the whole market." QQQ is similarly U.S.-focused at 96.3%, yet the tiny 3.6% slice of foreign stocks is still three times VTI's international weight. Both ETFs treat cash as a rounding error, so your money stays almost fully invested.

The practical takeaway is subtle but useful: if you're building a simple core-and-satellite portfolio, VTI's 99% domestic weight lets you pair it with a separate international fund and know precisely how much global exposure you have. QQQ's modest foreign tilt won't move the needle much, but it does mean you're getting a smattering of overseas revenue mostly through multinationals like Taiwan Semiconductor that you won't find in VTI's broader basket.

Regional Allocation

VTI keeps things simple with 99.5% of its holdings in North American companies, essentially giving you the entire U.S. market with barely a whisper of international exposure. The remaining half-percent gets sprinkled across developed Europe, the UK, and emerging markets, but these positions are so small they barely move the needle. This near-total domestic focus makes sense when you remember VTI tracks the whole U.S. stock market, from Apple down to the smallest public companies.

QQQ takes a slightly different approach, allocating 97.6% to North America while leaving more room for international names at 2.4%. That might not sound like much, but it's nearly five times VTI's international allocation, with heavier tilts toward European developed markets (1.2%) and emerging Asia (0.4%). The difference reflects how the Nasdaq-100 includes more multinational tech giants with foreign listings, plus some ADRs of international companies that meet the index criteria. For investors, this means QQQ offers a touch more global diversification, though both ETFs remain overwhelmingly U.S.-centric at their core.

Sector Weights

VTI spreads its bets across the entire U.S. market, so even its largest slice technology at 33 percent feels moderate. Add the 13 percent in financial services and the 10 percent stakes in both healthcare and consumer cyclicals, and no single theme drives the bus. The fund even keeps about 3 percent in energy and 2 percent in utilities, small but noticeable positions that can soften the blow when tech wobbles.

QQQ, in contrast, is a technology portfolio wearing an index costume: more than half the fund sits in tech stocks, and when you fold in the 16 percent parked in communication services (think Alphabet and Meta), you're looking at roughly two-thirds of every dollar chasing the same growth story. Financials barely register at 0.3 percent, industrials and energy are after-thoughts, and defensive sectors like utilities and real estate get microscopic weights. That skew has helped when mega-caps rally, but it also means a simple rotation out of growth can leave the whole basket looking for a place to land.

Top 10 Holdings

Both ETFs share the same three tech giants at the top - NVIDIA, Apple, and Microsoft - but QQQ's concentration runs hotter. The Invesco fund puts 8.6% into NVIDIA versus 6.6% for VTI, and the gap persists through the roster: Apple 7% vs 6.1%, Microsoft 6.4% vs 5.5%. Add it up and QQQ's top five positions consume 30.7% of assets, while VTI holds a more modest 24.3%. That's the difference between holding 100 large caps (QQQ's Nasdaq-100) and sampling the entire U.S. market.

The holdings reveal each fund's DNA. QQQ makes a $3.8% bet on Tesla, a stock VTI barely keeps in its top five. Meanwhile VTI's fifth slot goes to Alphabet Class A at 2.8%, reflecting the index's inclusion of both share classes across its broader universe. For investors, this means QQQ offers purer large-cap tech exposure with bigger individual stock swings, while VTI's wider net smooths out the impact of any single name.

Valuation & Growth Metrics

QQQ trades at a clear premium: 25× earnings versus 21.5× for VTI, and price-to-book jumps to 6.4× compared with 4.1×. The gap widens further on sales QQQ’s 5× revenue multiple is almost double VTI’s 2.9×. Those higher multiples are buying faster historical profit growth; QQQ’s 15.8 % annual earnings clip over the past five years dwarfs VTI’s 8.7 %. Long-term projections barely differ both cluster around 10.8 % so the extra valuation is really payment for momentum that has already happened, not for dramatically brighter futures.

What this means in practice is that QQQ leaves less room for disappointment. If tech’s past edge slips, the index has 51 % exposure there and a richer starting price, so any slowdown gets amplified. VTI’s broader 33 % tech weight and lower starting multiples give more cushion, but also less upside if large-caps keep racing ahead. Neither choice is “wrong”; one simply prices in more perfection than the other.

Which ETF Fits Your Portfolio?

VTI gives you the entire U.S. market in one package: every cap size, every sector, and a 0.03% fee that leaves almost nothing on the table. The trade-off is plain you’re buying the average, so when mega-tech runs hot you’ll own it at only 33% weight and trail a growth benchmark; last year that cost about 3.4 percentage points versus QQQ’s 17.5% gain. QQQ narrows the field to the hundred largest non-financial Nasdaq names, half of them tech, and the concentration shows: higher 25× P/E, lower 0.46% yield, and a 0.20% expense ratio that still feels cheap for a growth play.

Pick the one whose behavior you’re willing to live with. Want to wake up knowing you own the whole market and won’t have to second-guess sector swings? VTI does that for the price of a coffee each year. Comfortable accepting a bumpier ride in exchange for heavier tech exposure and the chance to outperform when innovation stocks rally? QQQ delivers that, just don’t be surprised if the next rotation out of growth hits harder. Owning both isn’t heresy either many investors use VTI as the core and sprinkle QQQ on top to tilt the odds without betting the farm.

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.