qqqm vs voo vs brk/b

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QQQM vs. VOO: a comparison of ETFs
QQQM (Invesco NASDAQ 100 ETF) and VOO (Vanguard S&P 500 ETF) are both popular passively managed ETFs that track well-known market indices but differ in their underlying focus and characteristics.
Here's a breakdown of their key differences:
1. Index tracked
QQQM: Tracks the NASDAQ-100 Index, comprised of the 100 largest non-financial companies listed on the Nasdaq Stock Market.
VOO: Tracks the S&P 500 Index, which represents 500 of the largest publicly traded companies in the US, across various sectors.
2. Holdings and sector concentration
QQQM: Heavily weighted towards technology companies. The top holdings typically include major tech giants like Apple, Microsoft, and Nvidia. This concentration exposes it to the performance of these specific companies and the tech sector as a whole.
VOO: Offers broader diversification across various sectors of the US economy, including technology, healthcare, financials, and more. Its top holdings include some of the same large companies as QQQM, but with less overall concentration in any single sector.
3. Expense ratio
QQQM: Has a higher expense ratio compared to VOO.
VOO: Known for its low expense ratio, making it a very cost-effective option for investors.
4. Performance and risk
Performance: QQQM, due to its heavier allocation to high-growth tech companies, has historically shown higher returns than VOO over some periods, particularly in recent years. For example, in the past year, QQQM returned a total of 22.97% compared to VOO's 19.27%. However, past performance doesn't guarantee future results.
Risk: QQQM, with its greater concentration in technology and growth stocks, tends to exhibit higher volatility and potentially larger drawdowns during market corrections. Morningstar notes that the Nasdaq-100 Index (tracked by QQQM) does not usually offer significant diversification benefits and has been subject to greater drawdown risk compared to the broader market. VOO, with its broader diversification, offers a more balanced risk profile.
5. Dividends
QQQM: Has a lower dividend yield compared to VOO.
VOO: Typically offers a higher dividend yield than QQQM.
In summary
Choose QQQM if: You are comfortable with higher risk and volatility, believe in the continued strong growth of the technology sector, and are seeking potentially higher returns.
Choose VOO if: You prefer broader market exposure, seek lower costs, and are looking for a more diversified and potentially less volatile investment option for the long term.
Ultimately, the best choice depends on your individual investment goals, risk tolerance, and time horizon. It's crucial to consider these factors and potentially consult with a financial advisor before making any investment decisions.
generally, the Invesco QQQ ETF (QQQ) has outperformed the S&P 500 over the past 10 years, and in many shorter time periods as well. QQQ's focus on the Nasdaq-100, which is heavily weighted towards technology stocks, has often led to higher returns than the broader S&P 500, which includes a wider range of sectors.