XLC vs. QQQ

Last updated Jun 14, 2026

XLC (Communication Services Select Sector SPDR Fund) and QQQ (Invesco QQQ ETF) are both exchange-traded funds - XLC is a Communications Equities fund tracking the S&P Communication Services Select Sector Index, while QQQ is a Nasdaq-100 fund tracking the NASDAQ-100 Index. Both are passively managed. Over the past 5 years, XLC returned 8.03%/yr vs 16.85%/yr for QQQ. Their correlation of 0.82 suggests significant overlap in exposure. XLC charges 0.13%/yr vs 0.18%/yr for QQQ.

Performance

XLC vs. QQQ - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Communication Services Select Sector SPDR Fund (XLC) and Invesco QQQ ETF (QQQ). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, XLC achieves a -4.85% return, which is significantly lower than QQQ's 17.57% return.

XLC

• 1D: -0.42%
• 1M: -4.66%
• YTD: -4.85%
• 6M: -3.59%
• 1Y: 10.19%
• 3Y*: 21.60%
• 5Y*: 8.03%
• 10Y*: —

QQQ

• 1D: 0.59%
• 1M: 0.22%
• YTD: 17.57%
• 6M: 17.85%
• 1Y: 37.55%
• 3Y*: 26.43%
• 5Y*: 16.85%
• 10Y*: 21.79%

*Multi-year figures are annualized to reflect compound growth (CAGR)

XLC vs. QQQ - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018
XLC Communication Services Select Sector SPDR Fund	-4.85%	23.08%	34.71%	52.82%	-37.63%	15.96%	26.90%	31.05%	-16.45%
QQQ Invesco QQQ ETF	17.57%	20.77%	25.58%	54.86%	-32.58%	27.42%	48.62%	38.96%	-12.19%

Correlation

The correlation between XLC and QQQ is 0.55, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.55
Correlation (3Y) Calculated over the trailing 3-year period	0.71
Correlation (5Y) Calculated over the trailing 5-year period	0.80
Correlation (All Time) Calculated using the full available price history since Jun 19, 2018	0.82

Over the past year, the correlation between XLC and QQQ has dropped to 0.55 - well below their long-term average of 0.82, suggesting their price drivers have been diverging.

XLC vs. QQQ - Sectors Allocation Comparison

Sectors	XLC	QQQ
Communication Services	95.1%	14.3%
Technology	4.7%	58.7%
Basic Materials	-	1.0%
Consumer Cyclical	-	11.4%
Consumer Defensive	-	6.4%
Energy	-	0.5%
Financial Services	-	0.2%
Healthcare	-	3.7%
Industrials	-	2.6%
Real Estate	-	0.1%
Utilities	-	1.2%

Return for Risk

XLC vs. QQQ — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

XLC

XLC Risk / Return Rank: 22
XLC Sharpe Ratio Rank: 22
XLC Sortino Ratio Rank: 22
XLC Omega Ratio Rank: 20
XLC Calmar Ratio Rank: 22
XLC Martin Ratio Rank: 24

QQQ

QQQ Risk / Return Rank: 71
QQQ Sharpe Ratio Rank: 75
QQQ Sortino Ratio Rank: 70
QQQ Omega Ratio Rank: 73
QQQ Calmar Ratio Rank: 69
QQQ Martin Ratio Rank: 70

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

XLC vs. QQQ - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Communication Services Select Sector SPDR Fund (XLC) 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.

	XLC	QQQ	Difference
Sharpe ratio: Return per unit of total volatility	0.69	2.09	-1.41
Sortino ratio: Return per unit of downside risk	1.08	2.73	-1.65
Omega ratio: Gain probability vs. loss probability	1.12	1.37	-0.25
Calmar ratio: Return relative to maximum drawdown	0.86	3.01	-2.15
Martin ratio: Return relative to average drawdown	2.73	11.22	-8.49

XLC vs. QQQ - Sharpe Ratio Comparison

The current XLC Sharpe Ratio is 0.69, which is lower than the QQQ Sharpe Ratio of 2.09. The chart below compares the historical Sharpe Ratios of XLC and QQQ, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

XLC vs. QQQ - Drawdown Comparison

The maximum XLC drawdown since its inception was -46.65%, smaller than the maximum QQQ drawdown of -82.97%. Use the drawdown chart below to compare losses from any high point for XLC and QQQ.

Drawdown Indicators

	XLC	QQQ	Difference
Max Drawdown Largest peak-to-trough decline	-46.65%	-82.97%	+36.32%
Max Drawdown (1Y) Largest decline over 1 year	-10.57%	-11.96%	+1.39%
Max Drawdown (3Y) Largest decline over 3 years	-17.97%	-22.77%	+4.80%
Max Drawdown (5Y) Largest decline over 5 years	-46.65%	-35.12%	-11.53%
Max Drawdown (10Y) Largest decline over 10 years	—	-35.12%	—
Current Drawdown Current decline from peak	-6.72%	-3.33%	-3.39%
Average Drawdown Average peak-to-trough decline	-10.58%	-32.75%	+22.17%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.33%	3.20%	+0.13%

Volatility

XLC vs. QQQ - Volatility Comparison

The current volatility for Communication Services Select Sector SPDR Fund (XLC) is 3.57%, while Invesco QQQ ETF (QQQ) has a volatility of 7.56%. This indicates that XLC 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.

Volatility by Period

	XLC	QQQ	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.57%	7.56%	-3.99%
Volatility (6M) Calculated over the trailing 6-month period	9.65%	13.81%	-4.16%
Volatility (1Y) Calculated over the trailing 1-year period	13.28%	17.19%	-3.91%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	20.68%	22.55%	-1.87%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.17%	22.38%	-0.21%

XLC vs. QQQ - Expense Ratio Comparison

XLC has a 0.13% 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

XLC vs. QQQ - Dividend Comparison

XLC's dividend yield for the trailing twelve months is around 1.25%, more than QQQ's 0.39% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
QQQ Invesco QQQ ETF	0.39%	0.45%	0.56%	0.62%	0.80%	0.43%	0.55%	0.74%	0.91%	0.84%	1.06%	0.99%
XLC Communication Services Select Sector SPDR Fund	1.25%	1.13%	0.99%	0.82%	1.10%	0.74%	0.68%	0.82%	0.64%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both XLC and QQQ in my portfolio?

XLC and QQQ have a correlation of 0.55, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XLC or QQQ?

QQQ has higher volatility (7.56%) compared to XLC (3.57%). In terms of maximum drawdown, XLC dropped -46.65% vs QQQ's -82.97%.

Which ETF is better, XLC or QQQ?

On 5-year performance, QQQ leads with 16.85% vs 8.03% for XLC. On fees, XLC is cheaper at 0.13% per year. On volatility, XLC has been the lower-risk option at 3.57%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLC or QQQ?

Over the 5-year period, QQQ has performed better with a 16.85% return vs 8.03%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLC or QQQ?

XLC is cheaper with a 0.13% expense ratio, compared with 0.18% for QQQ.

Which ETF pays a higher dividend yield, XLC or QQQ?

XLC has the higher dividend yield at 1.25%, compared with 0.39% for QQQ.

What is the main difference between XLC and QQQ?

XLC is categorized as Communications Equities, while QQQ is Nasdaq-100. XLC tracks S&P Communication Services Select Sector Index, while QQQ tracks NASDAQ-100 Index. They also come from different issuers: State Street and Invesco. Their fees differ too: 0.13% for XLC and 0.18% for QQQ.

Which has better risk-adjusted returns?

QQQ currently has the higher Sharpe Ratio (2.09 vs 0.69), 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.