VMBS vs. QQQ
VMBS (Vanguard Mortgage-Backed Securities ETF) and QQQ (Invesco QQQ ETF) are both exchange-traded funds - VMBS is a Mortgage Backed Securities fund tracking the Barclays Capital U.S. MBS Index, while QQQ is a Nasdaq-100 fund tracking the NASDAQ-100 Index. Both are passively managed. Over the past 10 years, VMBS returned 1.35%/yr vs 22.07%/yr for QQQ. At a correlation of -0.01, they often move in opposite directions. VMBS charges 0.04%/yr vs 0.18%/yr for QQQ.
Performance
VMBS vs. QQQ - Performance Comparison
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Returns By Period
In the year-to-date period, VMBS achieves a 0.92% return, which is significantly lower than QQQ's 16.45% return. Over the past 10 years, VMBS has underperformed QQQ with an annualized return of 1.35%, while QQQ has yielded a comparatively higher 22.07% annualized return.
VMBS
- 1D
- 0.09%
- 1M
- 0.63%
- YTD
- 0.92%
- 6M
- 1.02%
- 1Y
- 6.00%
- 3Y*
- 4.52%
- 5Y*
- 0.57%
- 10Y*
- 1.35%
QQQ
- 1D
- -3.29%
- 1M
- -0.43%
- YTD
- 16.45%
- 6M
- 14.99%
- 1Y
- 34.88%
- 3Y*
- 26.05%
- 5Y*
- 16.01%
- 10Y*
- 22.07%
VMBS vs. QQQ - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
VMBS Vanguard Mortgage-Backed Securities ETF | 0.92% | 8.36% | 1.70% | 5.34% | -11.90% | -1.28% | 3.76% | 6.19% | 0.91% | 2.47% |
QQQ Invesco QQQ ETF | 16.45% | 20.77% | 25.58% | 54.86% | -32.58% | 27.42% | 48.62% | 38.96% | -0.13% | 32.66% |
Correlation
The correlation between VMBS and QQQ is 0.28, which is low. Their price movements are largely independent, making them effective diversification partners.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.28 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.19 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.17 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.09 |
Correlation (All Time) Calculated using the full available price history since Nov 23, 2009 | -0.01 |
The correlation between VMBS and QQQ shifts across timeframes, from -0.01 (all time) to 0.28 (1 year), reflecting how their relationship changes across market environments.
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Return for Risk
VMBS vs. QQQ — Risk / Return Rank
VMBS
QQQ
VMBS vs. QQQ - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Vanguard Mortgage-Backed Securities ETF (VMBS) and Invesco QQQ ETF (QQQ). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.
Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.
| VMBS | QQQ | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -0.55 | ||
| Sortino ratioReturn per unit of downside risk | -0.49 | ||
| Omega ratioGain probability vs. loss probability | 1.25 | 1.35 | -0.09 |
| Calmar ratioReturn relative to maximum drawdown | 2.24 | 2.93 | -0.69 |
| Martin ratioReturn relative to average drawdown | 7.12 | 10.86 | -3.75 |
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Drawdowns
VMBS vs. QQQ - Drawdown Comparison
The maximum VMBS drawdown since its inception was -17.47%, smaller than the maximum QQQ drawdown of -82.97%. Use the drawdown chart below to compare losses from any high point for VMBS and QQQ.
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Drawdown Indicators
| VMBS | QQQ | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -17.47% | -82.97% | +65.50% |
Max Drawdown (1Y)Largest decline over 1 year | -2.68% | -11.96% | +9.28% |
Max Drawdown (3Y)Largest decline over 3 years | -7.65% | -22.77% | +15.12% |
Max Drawdown (5Y)Largest decline over 5 years | -17.12% | -35.12% | +18.00% |
Max Drawdown (10Y)Largest decline over 10 years | -17.47% | -35.12% | +17.65% |
Current DrawdownCurrent decline from peak | -1.07% | -4.25% | +3.18% |
Average DrawdownAverage peak-to-trough decline | -2.49% | -32.73% | +30.24% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.84% | 3.22% | -2.38% |
Volatility
VMBS vs. QQQ - Volatility Comparison
The current volatility for Vanguard Mortgage-Backed Securities ETF (VMBS) is 1.19%, while Invesco QQQ ETF (QQQ) has a volatility of 9.17%. This indicates that VMBS experiences smaller price fluctuations and is considered to be less risky than QQQ based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| VMBS | QQQ | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.19% | 9.17% | -7.98% |
Volatility (6M)Calculated over the trailing 6-month period | 3.27% | 14.57% | -11.30% |
Volatility (1Y)Calculated over the trailing 1-year period | 4.30% | 17.96% | -13.66% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 6.78% | 22.69% | -15.91% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 5.41% | 22.42% | -17.01% |
VMBS vs. QQQ - Expense Ratio Comparison
VMBS has a 0.04% expense ratio, which is lower than QQQ's 0.18% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.
Dividends
VMBS vs. QQQ - Dividend Comparison
VMBS's dividend yield for the trailing twelve months is around 4.17%, more than QQQ's 0.43% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
QQQ Invesco QQQ ETF | 0.43% | 0.45% | 0.56% | 0.62% | 0.80% | 0.43% | 0.55% | 0.74% | 0.91% | 0.84% | 1.06% | 0.99% |
VMBS Vanguard Mortgage-Backed Securities ETF | 4.17% | 4.20% | 3.94% | 3.31% | 2.35% | 1.02% | 2.01% | 2.77% | 2.72% | 2.16% | 2.10% | 2.12% |
Frequently Asked Questions
VMBS and QQQ have a correlation of 0.28, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
QQQ has higher volatility (9.17%) compared to VMBS (1.19%). In terms of maximum drawdown, VMBS dropped -17.47% vs QQQ's -82.97%.
On 10-year performance, QQQ leads with 22.07% vs 1.35% for VMBS. On fees, VMBS is cheaper at 0.04% per year. On volatility, VMBS has been the lower-risk option at 1.19%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, QQQ has performed better with a 22.07% return vs 1.35%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
VMBS is cheaper with a 0.04% expense ratio, compared with 0.18% for QQQ.
VMBS has the higher dividend yield at 4.17%, compared with 0.43% for QQQ.
VMBS is categorized as Mortgage Backed Securities, while QQQ is Nasdaq-100. VMBS tracks Barclays Capital U.S. MBS Index, while QQQ tracks NASDAQ-100 Index. They also come from different issuers: Vanguard and Invesco. Their fees differ too: 0.04% for VMBS and 0.18% for QQQ.
QQQ currently has the higher Sharpe Ratio (1.95 vs 1.40), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.
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