Which tech ETF is better than QQQ?
For investors seeking an alternative to QQQ's mega-cap exposure, the Invesco S&P 500 Top 50 ETF (XLG) is an excellent option. XLG tracks the S&P 500 Top 50 Index, which, like QQQ, is heavily weighted towards top-tier tech and consumer stocks.
For investors seeking an alternative to QQQ's mega-cap exposure, the Invesco S&P 500 Top 50 ETF (XLG) is an excellent option. XLG tracks the S&P 500 Top 50 Index, which, like QQQ, is heavily weighted towards top-tier tech and consumer stocks.
| Ticker | Name | 5-year return |
|---|---|---|
| SMH | VanEck Semiconductor ETF | 33.31% |
| SOXX | iShares Semiconductor ETF | 31.31% |
| XSD | SPDR S&P Semiconductor ETF | 28.96% |
| PSI | Invesco Semiconductors ETF | 27.97% |
QQQ - Performance Comparison. In the year-to-date period, VGT achieves a 4.01% return, which is significantly higher than QQQ's 3.49% return. Over the past 10 years, VGT has outperformed QQQ with an annualized return of 20.53%, while QQQ has yielded a comparatively lower 18.38% annualized return.
Currently, VGT has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
VGT - Performance Comparison. In the year-to-date period, VOO achieves a 2.62% return, which is significantly lower than VGT's 4.01% return. Over the past 10 years, VOO has underperformed VGT with an annualized return of 12.65%, while VGT has yielded a comparatively higher 20.53% annualized return.
| Symbol | Name | 5-Year Return |
|---|---|---|
| PSI | Invesco Semiconductors ETF | 26.92% |
| XSD | SPDR S&P Semiconductor ETF | 26.59% |
| IYW | iShares U.S. Technology ETF | 26.10% |
| ITB | iShares U.S. Home Construction ETF | 25.77% |
- BetaShares NASDAQ 100 ETF (NDQ)
- BetaShares Asia Technology Tigers ETF (ASIA)
- ETFS Morningstar Global Technology ETF (TECH)
- ETFS FANG+ ETF (FANG)
The top ETF of 2023 is iShares Expanded Tech Software Sector ETF (IGV), with a YTD return of 355.22%. Technology ETFs outperformed their peers this year, driven by the widespread adoption of AI and expectations of a soft landing in the economy in 2024.
The Fidelity Blue-Chip Growth ETF FBCG has jumped 58.7% in 2023 to become the best-performing U.S. fund, excluding ETNs and leveraged products, according to FactSet data. The WisdomTree U.S. Quality Growth Fund QGRW is up 56.2% this year, while the Invesco QQQ Trust Series I QQQ has risen 55.6% in 2023.
What beats QQQ?
VGT - Performance Comparison. In the year-to-date period, QQQ achieves a 0.85% return, which is significantly lower than VGT's 1.05% return. Over the past 10 years, QQQ has underperformed VGT with an annualized return of 17.80%, while VGT has yielded a comparatively higher 19.76% annualized return.
Expense Ratio – Advantage to SPY
Expense ratios are important because they determine how much you will pay out of your returns to the fund for operating your portfolio. SPY has the advantage in expense ratio with 0.09% compared to an expense ratio of 0.20% for QQQ.
Verdict. Both the QQQ and the VGT are excellent choices for growth investors who want to gain exposure to the high-growth tech sector without having to run the risks associated with picking individual stocks. However, some key differences between them may appeal to different types of investors.
| Ticker | Name | 1Y Return |
|---|---|---|
| XLK | Technology Select Sector SPDR Fund | 53.73% |
| IYW | iShares U.S. Technology ETF | 61.55% |
| IGV | iShares Expanded Tech-Software Sector ETF | 18.46% |
| SOXX | iShares PHLX Semiconductor ETF | 57.42% |
VGT is a solid choice for investors who want to gain exposure to the US information technology sector, which offers strong growth potential and diversification benefits. The fund has a low-cost structure, a dividend yield, and a proven track record of performance.
- Source: Vanguard: Data current as of January 2, 2024. Data is intended for informational purposes only.
- Total Bond Market ETF (BND)
- Total International Bond ETF (BNDX)
- Total International Stock ETF (VXUS)
- Total Stock Market ETF (VTI)
| Month-end | 1-yr | |
|---|---|---|
| VGT (Market price) | 4.95% | 52.75% |
| VGT (NAV) | 4.94% | 52.67% |
| Benchmark 1 | 4.95% | 52.64% |
VGT's dividend yield currently ranks #24 of 125 vs. its peers in the Technology Equities ETFs category.
Vanguard's unique cost structure, the economies of scale it has achieved, and the total number of assets under management (AUM) allow it to offer its ETFs at the lowest cost available in the market. We've listed 10 of the firm's cheapest ETFs by their expense ratio.
- Vanguard Large-Cap ETF VV.
- Avantis International Equity ETF AVDE.
- Pimco Active Bond ETF BOND.
What is the best ETF to buy and hold?
| ETF | Assets under management | Expense ratio |
|---|---|---|
| Vanguard Information Technology ETF (VGT) | $60 billion | 0.10% |
| Schwab US Dividend Equity ETF (SCHD) | $52 billion | 0.06% |
| Vanguard Total Stock Market ETF (VTI) | $348 billion | 0.03% |
| Vanguard Total International Stock ETF (VXUS) | $63 billion | 0.07% |
| Fund Name | Ticker | Expense Ratio |
|---|---|---|
| Vanguard Mega-Cap Growth | (NYSEMKT:MGK) | 0.07% |
| iShares Russell Mid-Cap Growth | (NYSEMKT:IWP) | 0.23% |
| Vanguard Small-Cap Growth | (NYSEMKT:VBK) | 0.07% |
| iShares MSCI EAFE Growth | (NYSEMKT:EFG) | 0.35% |
Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification.
The Roundhill Magnificent Seven ETF offers equal weight exposure to the “Magnificent Seven” stocks – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. MAGS is the first-ever ETF to track the Magnificent Seven.
| Stock | 2023 Performance* |
|---|---|
| 1. Jin Medical International Ltd. (ticker: ZJYL) | 3,020.1% |
| 2. Soleno Therapeutics Inc. (SLNO) | 1,932.8% |
| 3. Carvana Co. (CVNA) | 1,016.9% |
| 4. Cipher Mining Inc. (CIFR) | 637.5% |
