QQQ vs XLF: Head-to-Head Comparison
QQQ vs XLF: Invesco QQQ Trust has an expense ratio of 0.20% while Financial Select Sector SPDR Fund charges 0.09%. QQQ holds 101 securities vs XLF's 73. 5-year returns: 19.50% vs 12.80%.
Last updated: April 2026
Tech vs Financials
Quick Verdict
QQQ edges out XLF with a stronger Beginner Suitability Score (8.5 vs 8). It offers better overall characteristics for new investors.
Side-by-Side Comparison
| Metric | QQQ | XLF |
|---|---|---|
| Expense Ratio | 0.20% | 0.09% |
| AUM | $310.0B | $45.0B |
| Dividend Yield | 0.60% | 1.60% |
| Holdings | 101 | 73 |
| 1-Year Return | 29.80% | 28.50% |
| 5-Year Return (Ann.) | 19.50% | 12.80% |
| 10-Year Return (Ann.) | 18.50% | 11.20% |
| Beta | 1.15 | 1.08 |
| P/E Ratio | 33.2 | 17.2 |
QQQ 5-year annualized return is 19.50% compared to XLF's 12.80%. Over 10 years, QQQ returned 18.50% vs XLF's 11.20%.
View data table
| Period | QQQ Return | XLF Return |
|---|---|---|
| YTD | 3.50% | 3.50% |
| 1 Year | 29.80% | 28.50% |
| 3 Year | 13.20% | 10.50% |
| 5 Year | 19.50% | 12.80% |
| 10 Year | 18.50% | 11.20% |
Key Differences Between QQQ and XLF
QQQ (Invesco QQQ Trust) is a u.s. large-cap growth fund managed by Invesco. QQQ tracks the Nasdaq-100 index, which includes 100 of the largest non-financial companies listed on the Nasdaq stock exchange. It is heavily tilted toward technology and growth stocks, making it a favorite for investors who want concentrated exposure to the tech sector. Beginners should understand that QQQ can deliver higher returns than the S&P 500 in good years but also experiences sharper declines during downturns.
XLF (Financial Select Sector SPDR Fund) is a financial sector fund managed by State Street Global Advisors. XLF tracks the financial sector of the S&P 500, including banks, insurance companies, asset managers, and financial services firms. The financial sector is a major pillar of the U.S. economy and tends to benefit from rising interest rates and economic growth. Beginners should know that XLF provides targeted exposure to one sector, which makes it more volatile than a diversified fund but useful for investors with specific views on the financial industry.
The most notable differences are in fees (0.20% vs 0.09%), number of holdings (101 vs 73), and 5-year returns (19.50% vs 12.80%).
QQQ vs XLF multi-factor comparison: QQQ has a 0.20% expense ratio, 19.50% 5-year return, 101 holdings, 1.15 beta, and 0.60% yield. XLF has 0.09% expense ratio, 12.80% 5-year return, 73 holdings, 1.08 beta, and 1.60% yield.
View data table
| Metric | QQQ | XLF |
|---|---|---|
| Expense Ratio | 0.20% | 0.09% |
| 5-Year Return | 19.50% | 12.80% |
| Holdings | 101 | 73 |
| Beta | 1.15 | 1.08 |
| Dividend Yield | 0.60% | 1.60% |
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Holdings Overlap Analysis
0%
Holdings Overlap
QQQ and XLF share only 0% of their top holdings. These funds are quite different, making them complementary choices if you want broader market coverage.
QQQ and XLF share 0% of their top holdings (low overlap). QQQ has 101 total holdings and XLF has 73.
View data table
| Metric | QQQ | XLF |
|---|---|---|
| Overlap | 0% | 0% |
| Unique Holdings | 100% | 100% |
| Total Holdings | 101 | 73 |
Cost Comparison Over Time
If you invest $10,000 and hold for 20 years (assuming 8% annual returns):
QQQ
Fee cost: $1,696
XLF
Fee cost: $771
Over 20 years, the fee difference amounts to $925 on a $10,000 investment. XLF saves you more in fees over time.
On a $10,000 investment over 20 years at 8% return, QQQ (0.20% fee) grows to $44,913 while XLF (0.09% fee) grows to $45,839. The fee difference costs $926.
View data table
| Year | QQQ Value | XLF Value |
|---|---|---|
| 0 | $10,000 | $10,000 |
| 5 | $14,558 | $14,632 |
| 10 | $21,193 | $21,410 |
| 15 | $30,852 | $31,327 |
| 20 | $44,913 | $45,839 |
Which One Should a Beginner Choose?
Choose QQQ if: You want growth-oriented investors with a long time horizon and higher risk tolerance, investors who want concentrated exposure to technology and innovation leaders, younger investors who can tolerate short-term volatility for potentially higher long-term returns. It's managed by Invesco with an expense ratio of 0.20%.
Choose XLF if: You want investors who want to overweight the financial sector in their portfolio, those who believe rising interest rates will benefit banks and financial companies, value-oriented investors attracted to the sector's lower price-to-earnings ratio. It's managed by State Street Global Advisors with an expense ratio of 0.09%.
Can You Own Both QQQ and XLF?
Absolutely! With only 0% overlap, QQQ and XLF complement each other well. A simple portfolio might allocate 60% to one and 40% to the other, or you could pair them with a bond ETF like BND for a complete three-fund portfolio.
Frequently Asked Questions
Should I buy QQQ or XLF?▾
QQQ edges out XLF with a stronger Beginner Suitability Score (8.5 vs 8). It offers better overall characteristics for new investors. However, both are solid options. QQQ is best for investors who want growth-oriented investors with a long time horizon and higher risk tolerance, while XLF is better suited for investors who want to overweight the financial sector in their portfolio.
What is the difference between QQQ and XLF?▾
QQQ (Invesco QQQ Trust) tracks u.s. large-cap growth investments with 101 holdings and a 0.20% expense ratio. XLF (Financial Select Sector SPDR Fund) focuses on financial sector with 73 holdings at 0.09%. Their top holdings overlap by 0%.
Can I own both QQQ and XLF?▾
Yes! With only 0% holdings overlap, QQQ and XLF complement each other well. Owning both gives you broader diversification.