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ONEQ vs QQQ: Which NASDAQ ETF Is Better?

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In this article, we compare ONEQ vs QQQ.

However, it can be challenging to assess if you should invest in ONEQ or QQQ.

This article has compared these ETFs in basic information, performance evaluation, holding, and related facts.

Let’s start with the main difference between ONEQ vs QQQ.

ONEQ vs QQQ Graphic

 

ONEQ vs QQQ

The main difference between ONEQ and QQQ is the index they track.  ONEQ tracks the NASDAQ Composite Index, while QQQ tracks the NASDAQ 100 Index.

ONEQ matches price and performance with the NASDAQ Composite index. The NASDAQ composite index includes almost all of the securities listed on the NASDAQ exchange.

So, it represents overall market movement and performance.

ONEQ

  • Fund Inception: 2003
  • Offered By Fidelity
  • Tracks NASDAQ Composite
  • Expense Ratio 0.21%
  • Number Of Stocks: 1,120

QQQ

  • Inception Date: 1999
  • Tracks the Nasdaq-100 Index
  • Expense Ratio: 0.20%
  • Number Of Stocks: 103
  • Top 10 Holdings: 53%

On the other hand, QQQ is dependent on the NASDAQ-100 index. It means this index is dependent on the top 100 largest non-financial companies.

So, if the performance of these companies is enhanced, it leads to an increase in the value of ETFs and vice versa.

In addition to this, there are many other differences between ONEQ and QQQ in terms of holdings, performance, risk, return, management fee, and many different dynamics.

Let’s look at these ETFs and determine which one is better.

 

ONEQ vs QQQ Performance

The performance of an ETF is dependent on the underlying holding. So, the performance of an ETF is directly reliant on the assets.

Further, it’s one of the most crucial factors investors evaluate while investing. It’s because earning a return is the purpose of investment after managing risk.

Although, the past performance of ETF does not guarantee future performance. Yet, it helps understand return earning potential and volatility.

Here is how ONEQ and QQQ performance compares:

ONEQ vs QQQ Performance

The monthly, quarterly, and YTD statistics suggest there is not much difference between ONEQ and QQQ in terms of volatility and return.

Here is another chart that shows the performance of ONEQ and QQQ:

ONEQ vs QQQ Performance Chart

Similarities between ONEQ and QQQ

The following are some of the similarities between ONEQ and QQQ:

  • Both are ETFs.
  • The expense ratio for the ETFs is the same, with a minor difference of 0.01%.
  • Both ETFs fall in large-cap growth companies of the index.
  • MSI ESG ratings for both ETFs is AA.
  • Both the ETFs are passively managed, and performance is based on the index movement.

 

ONEQ vs QQQ Holdings

Holding structure refers to investment made by ETF in the companies. One of the significant differences between ONEQ and QQQ lies in the area of holding.

ONEQ invests in the composite NASDAQ, and QQQ invests in the NASDAQ-100 index.

Composite NASDAQ means a weighted index that reflects the performance of all companies that form part of the NASDAQ.

It also includes American Depositary Receipts (ADR), Real Estate Investment Trust (REITs), and limited partnerships.

So, there is extensive diversification.

On the contrary, NASDAQ-100 refers to the top hundred companies in the non-financial companies.

Let’s further analyze the holding structure for both ONEQ and QQQ.

ONEQ vs QQQ Holdings

The top ten holdings for ONEQ and QQQ amount to 47% and 52%, respectively.

It means both of these ETFs are concentrated in the NASDAQ. Further, the top ten companies for both ETFs are more or less the same.

However, the proportion of the investment is different.

So, we understand both ETFs have invested around 50% in more or less the same companies. However, there is a difference in the other half of the investment.

Another half of the investment for ONEQ is invested in the rest of the companies that form part of the index. It makes thousands of companies.

So, it’s highly diversified.

On the contrary, the other half of the investment for QQQ is made in around 93 top companies.

 

ONEQ vs QQQ Overlap

There is an overlap between ONEQ and QQQ that includes 102 stocks.  Almost all the holdings in QQQ are in ONEQ.  But, only 9% of ONEQ’s holdings are in QQQ.

Here are ONEQ and QQQ holdings overlap:

ONEQ vs QQQ Holdings Overlap

This overlap means ONEQ includes the majority of holdings in QQQ and many more holdings.

Overlap By Weight

ONEQ has more diversification compared to QQQ.

 

ONEQ vs QQQ Differences

The main difference between ONEQ and QQQ is the company that offers the ETF. ONEQ is provided by Fidelity, while Invesco provides QQQ.

ONEQ is issued and managed by Fidelity managing company. On the contrary, QQQ is issued and managed by the Invesco managing company.

ONEQ vs QQQ Comparison Chart

The expense ratio for the ONEQ amounts to 0.21%, and QQQ amounts to 0.20%. It means there is not much difference in terms of managing fees.

The size of assets under ONEQ amounts to $4 billion, and the asset size for QQQ amounts to $196 billion. This means the size of QQQ is larger than ONEQ, and therefore QQQ has more liquidity.

Therefore, we can expect some more stability from QQQ.

Similarly, there is a more significant difference in trade volume for these ETFs. The dollar trading value for QQQ is much higher.

However, the number of holdings for the ONEQ amount to 1,120, which means this ETF is well diversified and moves in line with the index.

So, if the overall market performs well and the index increases, the value of ETF increases and vice versa.

Although, it’s important to note that the top ten holding structures for ONEQ and QQQ do not deviate significantly.

For instance, the top ten holdings for the ONEQ amount to 47%, while for QQQ, it amounts to 52%.

Hence, around half the investment for both ETFs contains almost equal risk and reward.

However, the other half of the investment for ONEQ is distributed among thousands of companies in the index, and another half of QQQ is distributed to 93 companies only.

 

Does ONEQ Pay a Dividend?

Yes, the current dividend for ONEQ is 0.67%. This is paid quarterly to investors and amounts to $0.34 per share.

ONEQ has a higher dividend yield compared to other growth ETFs like QQQ which has a dividend yield of 0.48%.

 

ONEQ Description

  • Fund Inception: 2003
  • Offered By Fidelity
  • Tracks NASDAQ Composite
  • Expense Ratio 0.21%
  • Number Of Stocks: 1,120

The Fidelity NASDAQ Composite Index ETF (ONEQ) launched in 2003 and tracks the NASDAQ Composite Index.

ONEQ is passively managed and only tracks Nasdaq-listed companies and ignores those trading on the NYSE or other exchanges.

It has over $4 billion in net assets.

Fidelity’s ONEQ is heavily tilted towards growth stocks, and therefore that should be noted for potential new investors.

 

ONEQ Performance

ONEQ seeks to replicate the performance of the NASDAQ Composite Index.

It has resulted in excellent performance returns over the last 10 years:

ONEQ Performance Chart

In addition, the ETF gives access to over 1,120 of the most prominent publicly-traded companies in the United States.  It also provides diversification into all market capitalizations but focuses on large-cap growth companies.

ONEQ Performance

As you can see, ONEQ has performed well since its inception in 2003.

The ETF has a beta of 1.25 and a standard deviation of 18.34% for the trailing three-year period.  This makes ONEQ a medium-risk choice in its class.

The fund has roughly 1120 holdings.

Fidelity NASDAQ Composite Index ETF may be a good option for investors looking for Large-Cap Growth U.S. market exposure.

The benefits of this ETF include expense ratio and momentum.

 

ONEQ Holdings

The top 10 holdings for ONEQ make up 47% of its total assets.

ONEQ Holdings

Fidelity’s ONEQ holds Apple, Microsoft, Amazon, Alphabet, Tesla, and over 1,000 other stocks.

 

No Minimum Investment

ONEQ and QQQ are exchange-traded funds (ETFs), so there is no minimum investment.

The only requirement is the need to purchase at least one total share.

Typically, fractional shares are unavailable for ETFs unless you use M1 Finance.  (Get $50 When You Use This Link)

M1 Finance allows you to purchase fractional shares with no commission.

Buying fractional shares allows you to maximize your investment.  You won’t have to keep your money sitting idle until you have enough to purchase a total share.

This is especially beneficial when buying QQQ.

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Personal Capital Retirement Fee Analyzer

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QQQ Description

  • Tracks the Nasdaq-100 Index
  • Expense Ratio: 0.20%
  • Number Of Stocks: 103
  • Top 10 Holdings: 53%
  • Technology Weighted

Invesco (QQQ) is a growth ETF launched in 1999 by Nasdaq as the Nasdaq 100 Trust.  QQQ is designed to track the Nasdaq 100 index.

The name was changed in the early 2000s after PowerShare and Invesco acquired the index.

QQQ Profile

The fund closely tracks the standards and performance of the Nasdaq 100 Trust to replicate its return results.

The Nasdaq 100 Index adopts a modified capitalization methodology that uses individual weights of included items according to their market capitalization.

Weighting allows constraints to limit the influence of the largest companies and balance the index with all of its members.

To accomplish this, Nasdaq reviews the index’s composition each quarter and adjusts weightings if the distribution requirements are not met.

 

QQQ Performance

Over the last 10 years, QQQ has outperformed the S&P 500 with an average return of 20.34% per year.

Here is the growth of $10,000 over 10 years with QQQ:

QQQ Performance

QQQ has performed well over the last 10 years, but there is no guarantee that the next 10 years will look the same.

Since its inception, QQQ has shown outstanding performance, consistently outperforming the S&P 500 benchmark index.

The fund ranks in the top 1% of large-cap growth funds.

Due to QQQ’s outstanding performance, the fund has become one of the most popular funds among long-term investors.

It now has $196 billion in total assets.

 

QQQ Holdings

QQQ is the fourth-most popular ETF globally, with 103 securities holdings, most of which are top technological companies.

These companies cut across various industries, including:

  • Cloud Computing
  • Payment Services
  • Electric Vehicles
  • Data Collection

QQQ excludes financial companies.  Invesco’s QQQ is a large capitalization index focused on technology companies.

Here are the top holdings for QQQ:

QQQ Top Holdings

QQQ is largely made up of Apple, Microsoft, Amazon, and Tesla.

 

Which Is Better ONEQ or QQQ?

ONEQ and QQQ are similar investments.  They have had the same performance over the last 10 years and have almost the same expense ratio.

Both ETFs are well known and managed by Fidelity (ONEQ) and Invesco (QQQ).

ONEQ offers more diversification and less volatility since it holds more stocks.

Which is better will likely depend on which brokerage you prefer to use.

Fidelity customers will likely prefer ONEQ.

Invesco customers will probably choose QQQ.

That said, slight differences could make QQQ better for some investors.

QQQ offers more liquidity with $196 billion in net assets.

It’s important to consider costs and fees because they can cost you in the long run.  That’s why it’s so important to buy and sell your shares commission-free.

Again a great way to do this is with M1 Finance.

You can purchase fractional shares for free, and they give you the ability to buy QQQ, ONEQ, and thousands of other stocks/ETFs.

Related Posts:

 

Winner: QQQ

Based on the facts and information, we conclude that ONEQ and QQQ are stable funds.

I prefer QQQ because:

  • QQQ is a highly stable ETF with more liquidity.
  • The expense ratio is lower for the QQQ.
  • QQQ is sufficiently diversified.

The decision might come down to which brokerage you prefer to use.

 

Frequently Asked Questions (FAQs)

How Many Companies Are There In ONEQ?

Fidelity’s ONEQ holds Apple, Microsoft, Amazon, Alphabet, Tesla, and over 1,000 other stocks. The exact amount of companies that are currently in ONEQ is 1,120.

 


Disclaimer
This post may have affiliate links, which means I may receive commissions if you choose to purchase through links I provide (at no extra cost to you). Thank you for supporting the work I put into this site!

This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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