Better Growth ETF: QQQM vs. VGT

Not everyone prefers to instrumentality the aforesaid attack to investing. While immoderate investors admit and similar the guaranteed income of dividend stocks, others similar the appreciation opportunities of maturation stocks. Neither is amended than the other, but maturation stocks person been among the astir fashionable stocks connected the marketplace implicit the past decennary oregon so.

Growth stocks tin often beryllium volatile, truthful 1 of the champion ways to instrumentality vantage of their imaginable portion minimizing hazard is done a growth-focused ETF. Two fashionable choices are the Invesco Nasdaq-100 ETF (NASDAQ: QQQM) and the Vanguard Information Technology ETF (NYSEMKT: VGT).

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They've some been among the best-performing ETFs successful caller years, but which is the amended maturation option? Let's see.

Same goal, antithetic attack

Although some ETFs person a maturation focus, they attack it differently. QQQM mirrors the Nasdaq-100, an scale that tracks the 100 largest non-financial companies listed connected the Nasdaq banal exchange. VGT tracks the returns of the accusation exertion (tech) sector.

There's a spot of overlap betwixt the two, particularly successful the apical holdings. Six of their apical 10 holdings are the same:

Data sources: Invesco and Vanguard. QQQM percentages arsenic of May 29; VGT arsenic of April 30.

Both ETFs are heavy influenced by however these companies perform, but VGT's show really rests connected Nvidia, Apple, and Microsoft, arsenic they relationship for implicit 43% of the ETF.

The quality with QQQM, however, is that it includes nontech companies that assistance cushion against tech-specific unsmooth patches. Tech companies inactive marque up the bulk of QQQM (63.6%), but a assemblage similar user discretionary tin assistance prime up immoderate of the slack, accounting for 19.7% of the ETF.

Which ETF has been the amended performer?

Since VGT began trading successful January 2004, it has performed astir identically to the Nasdaq-100 (QQQM wasn't created until October 2020). In caller years, however, VGT has edged retired QQQM, though some person performed astir arsenic good arsenic you could hope.

Data source: YCharts. Returns arsenic of marketplace adjacent connected May 29. QQQM returns are based connected the Nasdaq-100.