The Invesco QQQ Trust, Series 1 (NASDAQ:QQQ) and the iShares Russell 2000 Growth ETF (NYSEMKT:IWO) differ most in market cap exposure, sector mix, and historical risk, with IWO charging a slightly higher fee for broader small-cap growth coverage.
Both QQQ and IWO are popular exchange-traded funds with distinct aims: QQQ tracks the NASDAQ-100, dominated by large-cap tech, while IWO targets small-cap U.S. companies with strong growth characteristics. This comparison breaks down key differences in cost, performance, risk, and portfolio makeup to help investors decide which may better suit specific goals.
|
Metric |
QQQ |
IWO |
|---|---|---|
|
Issuer |
Invesco |
IShares |
|
Expense ratio |
0.18% |
0.24% |
|
1-yr return (as of 2026-02-04) |
15.5% |
11.6% |
|
Dividend yield |
0.5% |
0.5% |
|
Beta |
1.15 |
1.14 |
|
AUM |
$398.6 billion |
$13.1 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.
IWO charges a 0.24% expense ratio, making it modestly more expensive than QQQ’s 0.18% fee, while both funds currently yield 0.5%, offering limited income potential.
|
Metric |
QQQ |
IWO |
|---|---|---|
|
Max drawdown (5 y) |
-35.12% |
-42.02% |
|
Growth of $1,000 over 5 years |
$1,828 |
$1,016 |
IWO tracks over 1,000 U.S. small-cap growth stocks, with the largest sector weights in industrials (25%), healthcare (23%), and technology (20%). Its top holdings—Bloom Energy Class A Corp (NYSE:BE), Fabrinet (NYSE:FN), and Credo Technology Group Holding Ltd (NASDAQ:CRDO)—each make up a small fraction of the portfolio, reflecting broad diversification. The fund has a long track record at 25.5 years and no notable structural quirks.
In contrast, QQQ is heavily concentrated in large-cap technology, with over half its assets in that sector and sizable positions in NVIDIA Corp (NASDAQ:NVDA), Apple Inc (NASDAQ:AAPL), and Microsoft Corp (NASDAQ:MSFT). QQQ holds just over 100 names, resulting in greater concentration risk but also a sharper focus on industry leaders. Both funds follow straightforward, rules-based approaches without leverage or thematic overlays.
These two ETFs cover two very different segments of the growth stock universe, and both may deserve a spot in a portfolio.
The QQQ is focused on the large-cap technology sector, tracking the Nasdaq 100. That means it includes all of the Magnificent Seven stocks as well as other tech high-flyers like Broadcom (NASDAQ:AVGO) and Palantir (NASDAQ:PLTR). With some $412 billion in assets under management, it is among the largest ETFs on the market. It has also been a stellar performer. Over the past five and 10-year periods, it has average annualized returns of 12% and 20%, respectively.
