QQQ vs XLK: fees, holdings and returns
QQQ holds the 100 largest non-financial companies on the Nasdaq, from tech, shopping, media and health. XLK holds only the technology companies in the S&P 500, about 75. XLK is one industry, while QQQ spreads a little wider. Over the same dates since March 1999, QQQ returned about 10.7% a year and XLK returned about 10.1% a year.
Written by the Tactfolio research team. Fund facts checked October 16, 2026. Prices through October 20, 2026.
Key points
- XLK costs less: 0.08% a year against 0.18%.
- QQQ started trading in March 1999. XLK started in December 1998.
- Worst drops since 1999: QQQ −83.0%, XLK −82.0%.
- Daily correlation: 0.94 (1 means they always move together).
What is the difference between QQQ and XLK?#
QQQ is picked by exchange and size, so it holds online stores, media and drug companies as long as they are large and on Nasdaq. XLK is picked by industry, so it holds chip, software and hardware companies from any exchange. Some famous names are counted as communication or shopping companies, not technology, so they are in QQQ but not XLK. XLK charges a lower fee.
| Fact | QQQ | XLK |
|---|---|---|
| Full name | Invesco QQQ Trust, Series 1 | State Street Technology Select Sector SPDR ETF |
| Issuer | Invesco | SPDR (State Street) |
| Expense ratio | 0.18% a year | 0.08% a year |
| Started trading | March 10, 1999 | December 16, 1998 |
| Tracks | Nasdaq-100 Index | Technology Select Sector Index |
| Holdings | n/a | 75 holdings as of October 15, 2026 |
| Type | US stocks, ETF | US stocks, ETF |
Fund facts checked on the Invesco QQQ page and the SPDR (State Street) XLK page.
Is QQQ or XLK cheaper?#
XLK costs less: 0.08% a year against 0.18%. On $10,000, that is about $18 a year for QQQ and $8 for XLK. The fund takes its fee out of its own value a little each day, so you never get a bill.
QQQ vs XLK performance over the same dates#
Both funds are measured from March 1999 to October 2026, the dates both traded. QQQ returned about 10.7% a year and XLK returned about 10.1% a year. QQQ came out ahead over this period, which does not mean it will again.
| Measure | QQQ | XLK |
|---|---|---|
| $10,000 grew to | $166,959 | $141,478 |
| Total return | 1,570% | 1,315% |
| Return per year (CAGR) | 10.7% | 10.1% |
| Worst drop from a high | −83.0% | −82.0% |
| Volatility (how much it swings) | 26.9% | 25.9% |
| Last 12 months | 17.9% | 29.3% |
| Last 3 years, per year | 27.2% | 32.1% |
| Last 5 years, per year | 14.5% | 19.4% |
| Last 10 years, per year | 20.6% | 24.1% |
Prices through October 20, 2026. Figures use daily closing prices adjusted for splits, with dividends reinvested. They do not include taxes or the cost of buying and selling. Past results do not tell you what will happen next.
QQQ and XLK returns by year#
| Year | QQQ | XLK |
|---|---|---|
| 2026 (part of the year) | 17.2% | 29.3% |
| 2025 | 20.8% | 24.6% |
| 2024 | 25.6% | 21.6% |
| 2023 | 54.9% | 56.0% |
| 2022 | −32.6% | −27.7% |
| 2021 | 27.4% | 34.7% |
| 2020 | 48.4% | 43.6% |
| 2019 | 39.0% | 49.9% |
| 2018 | −0.1% | −1.7% |
| 2017 | 32.7% | 34.3% |
| 2016 | 7.1% | 15.0% |
| 2015 | 9.4% | 5.5% |
| 2014 | 19.2% | 17.8% |
| 2013 | 36.6% | 26.2% |
| 2012 | 18.1% | 15.3% |
| 2011 | 3.5% | 2.6% |
| 2010 | 20.1% | 11.4% |
| 2009 | 54.7% | 51.3% |
| 2008 | −41.7% | −41.5% |
| 2007 | 19.0% | 15.5% |
| 2006 | 7.1% | 12.2% |
| 2005 | 1.6% | −0.3% |
| 2004 | 10.5% | 5.6% |
| 2003 | 49.7% | 38.7% |
| 2002 | −37.4% | −38.2% |
| 2001 | −33.3% | −23.4% |
| 2000 | −36.1% | −41.9% |
| 1999 (part of the year) | 79.0% | 52.6% |
Which fell further in bad times?#
A drawdown is how far a fund falls from its last high point. QQQ’s worst fall was −83.0%, from March 27, 2000 to October 9, 2002. It got back to that high on February 20, 2015.
XLK’s worst fall was −82.0%, from March 27, 2000 to October 9, 2002. It got back to that high on March 1, 2017.
Their daily moves had a correlation of 0.94. A correlation of 1 means two funds always move up and down together. Near 0 means they move on their own. So holding both adds little variety.
Why people choose QQQ or XLK#
QQQ. People who want large growth companies beyond tech alone tend to pick QQQ.
XLK. People who want only the technology industry among large US companies tend to pick XLK.
Strategies that hold QQQ or XLK#
These classic strategies hold one or both at least some of the time. Each is a set of written rules you can open, test and copy.
- Bold Asset Allocation (BAA), by Wouter Keller, 2022 (holds QQQ)
- Defensive Asset Allocation (DAA), by Wouter Keller and JW Keuning, 2018 (holds QQQ)
- Protective Asset Allocation (PAA), by Wouter Keller and JW Keuning, 2016 (holds QQQ)
- Vigilant Asset Allocation G12 (VAA-G12), by Wouter Keller and JW Keuning, 2017 (holds QQQ)
- Bold Asset Allocation G4 (BAA aggressive), by Wouter Keller, 2022 (holds QQQ)
- Quint Switching Filtered (Lewis Glenn’s QSF), by Lewis A. Glenn, 2018 (holds QQQ)
- Lethargic Asset Allocation (Keller’s LAA), by Wouter J. Keller, 2019 (holds QQQ)
- Resilient Asset Allocation (Keller’s RAA), by Wouter J. Keller, 2020 (holds QQQ)
- Pragmatic Asset Allocation (Quantpedia’s PAA), by Radovan Vojtko and Juliána Javorská (Quantpedia), 2024 (holds QQQ)
- Faber sector rotation (the three strongest US sectors), by Mebane Faber, 2010 (holds XLK)
- Inflation Compass (Varadi’s growth and inflation model), by David Varadi, 2026 (holds XLK)
Other funds like QQQ and XLK#
Each fund has more funds that hold the same kind of investments, ranked by how closely they move with it: QQQ alternatives and XLK alternatives.
Test a mix of QQQ and XLK#
Open the builder, add QQQ and XLK, and give each a weight, such as 50% and 50%. The backtest shows how the mix would have done, with its worst drop, on daily prices. You can also add a rule, for example to switch between them, and compare. Read the full pages for QQQ and XLK, or see more ETF comparisons.
The details#
Both funds use Tactfolio’s stored daily prices, adjusted for splits, with dividends reinvested. They are compared only on days both traded, starting the later fund’s first day, so neither gets a head start. Correlation uses daily returns over the same days. Read what a backtest simulates for more on these measures.
Common questions#
Does XLK hold Amazon or Google?#
No. Under the S&P sector rules, Amazon counts as consumer discretionary and Alphabet as communication services, so they are not in XLK. QQQ holds both.
Is XLK more concentrated than QQQ?#
Yes. XLK holds fewer companies from one industry, and its largest holdings make up a big share of the fund.
Which is cheaper, QQQ or XLK?#
XLK costs less: 0.08% a year against 0.18%. Fees come from each issuer and were checked on October 16, 2026.
Which did better, QQQ or XLK?#
From March 1999 to October 2026, QQQ returned about 10.7% a year and XLK returned about 10.1% a year, with dividends reinvested. Their worst drops were −83.0% and −82.0%. Past returns do not tell you what comes next.