VUG vs QQQ - Which Tech Focused ETF Is Better?

Both VUG and QQQ provide investors with exposure to some of the top-performing tech companies in the stock market.

VUG focuses on growth stocks, while QQQ tracks the NASDAQ-100 index, comprising some of the most innovative and technology-focused companies.

But which one is the better choice for you? Let's dive in and find out.

VUG - Vanguard Growth ETF

Goal: VUG aims to track the performance of the CRSP US Large Cap Growth Index, which consists of large-cap U.S. growth stocks.

Number of Stocks held: 241

Dividend Yield: 0.58%

Annual Expense Fee: 0.04%.

Benefits of VUG: VUG is an excellent choice for investors looking to invest in a variety of growth stocks. With a low expense ratio and a diversified selection of stocks, it provides exposure to some of the most promising companies in the market. VUG also has a strong track record, having been launched in 2004.

Downsides of VUG: VUG's focus on growth stocks may result in higher volatility compared to a more diversified investment approach. Additionally, the fund's dividend yield is relatively low, so it may not be the best choice for investors seeking consistent income.

The Top 10 Stocks Held In $VUG:

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QQQ - Invesco QQQ Trust

Goal: QQQ aims to replicate the performance of the NASDAQ-100 Index, which includes 100 of the largest non-financial companies listed on the NASDAQ Stock Market. It is heavily weighted towards the tech industry.

Number of Stocks held: 101

Dividend Yield: 0.55%

Annual Expense Fee: 0.20%.

Benefits of QQQ: QQQ is an ideal choice for investors looking to gain exposure to some of the market's most innovative and technology-focused companies. With a long history of strong performance, it has become popular among investors seeking growth exposure.

Downsides of QQQ: The downside of QQQ is its higher expense ratio compared to VUG. Additionally, its focus on technology and innovation-driven companies results in a more volatile investment experience, particularly during market downturns.

The Top 10 Stocks Held In $QQQ:

Final Thoughts: VUG vs QQQ

Both VUG and QQQ could be valuable additions to your portfolio, depending on your investment goals and risk tolerance.

If you're looking for exposure to growth stocks and want a low-cost option with a more diversified selection, VUG could be a better choice.

On the other hand, if you're interested in investing in some of the most innovative and technology-focused companies with more concentrated tech exposure, QQQ may be more suitable.

So far this year, VUG has seen a 14.26% return, while QQQ has had a slightly higher return of 16.59% since the beginning of 2023.

Looking back over the past ten years, VUG hasn't quite kept up with QQQ, delivering an annualized return of 13.26% compared to QQQ's more impressive 17.16% annualized return.

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I recently put together a master list of 88 different ETFs designed to support different investment goals. You can grab it here.

And as always: Buy things that pay you to own them.

-Josh

Blog Post: #101

Do you have a suggestion on what ETFs I should compare next? Let me know here. :)