XLU vs. QQQ

Last updated Jun 9, 2026

XLU (State Street Utilities Select Sector SPDR ETF) and QQQ (Invesco QQQ ETF) are both exchange-traded funds - XLU is a Utilities Equities fund tracking the Utilities Select Sector Index, while QQQ is a Nasdaq-100 fund tracking the NASDAQ-100 Index. Both are passively managed. Over the past 10 years, XLU returned 8.99%/yr vs 21.59%/yr for QQQ. At a 0.34 correlation, their price movements are largely independent. XLU charges 0.08%/yr vs 0.18%/yr for QQQ.

Performance

XLU vs. QQQ - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in State Street Utilities Select Sector SPDR ETF (XLU) 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, XLU achieves a 2.66% return, which is significantly lower than QQQ's 16.71% return. Over the past 10 years, XLU has underperformed QQQ with an annualized return of 8.99%, while QQQ has yielded a comparatively higher 21.59% annualized return.

XLU

• 1D: -1.87%
• 1M: -2.68%
• YTD: 2.66%
• 6M: 3.35%
• 1Y: 10.26%
• 3Y*: 12.85%
• 5Y*: 9.10%
• 10Y*: 8.99%

QQQ

• 1D: 1.56%
• 1M: 0.68%
• YTD: 16.71%
• 6M: 15.00%
• 1Y: 35.78%
• 3Y*: 27.15%
• 5Y*: 16.98%
• 10Y*: 21.59%

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

XLU vs. QQQ - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLU State Street Utilities Select Sector SPDR ETF	2.66%	16.03%	23.31%	-7.18%	1.44%	17.70%	0.51%	25.93%	3.94%	12.05%
QQQ Invesco QQQ ETF	16.71%	20.77%	25.58%	54.86%	-32.58%	27.42%	48.62%	38.96%	-0.13%	32.66%

Correlation

The correlation between XLU and QQQ is 0.08, meaning there is essentially no relationship between their price movements. Each responds to its own set of market drivers, making them strong candidates for combining in a diversified portfolio.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.08
Correlation (3Y) Calculated over the trailing 3-year period	0.12
Correlation (5Y) Calculated over the trailing 5-year period	0.23
Correlation (10Y) Calculated over the trailing 10-year period	0.23
Correlation (All Time) Calculated using the full available price history since Mar 11, 1999	0.34

Over the past year, the correlation between XLU and QQQ has dropped to 0.08 - well below their long-term average of 0.34, suggesting their price drivers have been diverging.

XLU vs. QQQ - Sectors Allocation Comparison

Sectors	XLU	QQQ
Utilities	100.0%	1.4%
Basic Materials	-	1.1%
Communication Services	-	15.8%
Consumer Cyclical	-	12.3%
Consumer Defensive	-	7.7%
Energy	-	0.6%
Financial Services	-	0.2%
Healthcare	-	4.2%
Industrials	-	2.8%
Real Estate	-	0.1%
Technology	-	53.8%

Return for Risk

XLU vs. QQQ — Risk / Return Rank

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

XLU

XLU Risk / Return Rank: 22
XLU Sharpe Ratio Rank: 22
XLU Sortino Ratio Rank: 21
XLU Omega Ratio Rank: 21
XLU Calmar Ratio Rank: 26
XLU Martin Ratio Rank: 21

QQQ

QQQ Risk / Return Rank: 69
QQQ Sharpe Ratio Rank: 74
QQQ Sortino Ratio Rank: 67
QQQ Omega Ratio Rank: 70
QQQ Calmar Ratio Rank: 66
QQQ Martin Ratio Rank: 68

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.

XLU vs. QQQ - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for State Street Utilities Select Sector SPDR ETF (XLU) 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.

	XLU	QQQ	Difference
Sharpe ratio: Return per unit of total volatility	0.71	2.15	-1.45
Sortino ratio: Return per unit of downside risk	1.04	2.77	-1.73
Omega ratio: Gain probability vs. loss probability	1.13	1.38	-0.25
Calmar ratio: Return relative to maximum drawdown	1.12	3.00	-1.88
Martin ratio: Return relative to average drawdown	2.47	11.43	-8.96
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

XLU vs. QQQ - Sharpe Ratio Comparison

The current XLU Sharpe Ratio is 0.71, which is lower than the QQQ Sharpe Ratio of 2.15. The chart below compares the historical Sharpe Ratios of XLU 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.

Sharpe Ratios by Period

	XLU	QQQ	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.71	2.15	-1.45
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.53	0.76	-0.23
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.47	0.97	-0.50
Sharpe Ratio (All Time) Calculated using the full available price history	0.40	0.40	-0.01

Drawdowns

XLU vs. QQQ - Drawdown Comparison

The maximum XLU drawdown since its inception was -51.98%, smaller than the maximum QQQ drawdown of -82.97%. Use the drawdown chart below to compare losses from any high point for XLU and QQQ.

Drawdown Indicators

	XLU	QQQ	Difference
Max Drawdown Largest peak-to-trough decline	-51.98%	-82.97%	+30.99%
Max Drawdown (1Y) Largest decline over 1 year	-9.18%	-11.96%	+2.78%
Max Drawdown (3Y) Largest decline over 3 years	-17.26%	-22.77%	+5.51%
Max Drawdown (5Y) Largest decline over 5 years	-25.26%	-35.12%	+9.86%
Max Drawdown (10Y) Largest decline over 10 years	-36.07%	-35.12%	-0.95%
Current Drawdown Current decline from peak	-8.18%	-4.03%	-4.15%
Average Drawdown Average peak-to-trough decline	-10.22%	-32.77%	+22.55%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.16%	3.14%	+1.02%

Volatility

XLU vs. QQQ - Volatility Comparison

The current volatility for State Street Utilities Select Sector SPDR ETF (XLU) is 5.60%, while Invesco QQQ ETF (QQQ) has a volatility of 6.84%. This indicates that XLU 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

	XLU	QQQ	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.60%	6.84%	-1.24%
Volatility (6M) Calculated over the trailing 6-month period	11.70%	13.20%	-1.50%
Volatility (1Y) Calculated over the trailing 1-year period	14.64%	16.74%	-2.10%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.34%	22.49%	-5.15%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	19.27%	22.36%	-3.09%

XLU vs. QQQ - Expense Ratio Comparison

XLU has a 0.08% 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

XLU vs. QQQ - Dividend Comparison

XLU's dividend yield for the trailing twelve months is around 2.73%, 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%
XLU State Street Utilities Select Sector SPDR ETF	2.73%	2.71%	2.96%	3.39%	2.92%	2.79%	3.14%	2.95%	3.33%	3.33%	3.41%	3.67%

Frequently Asked Questions

Can I hold both XLU and QQQ in my portfolio?

XLU and QQQ have a correlation of 0.08, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XLU or QQQ?

QQQ has higher volatility (6.84%) compared to XLU (5.60%). In terms of maximum drawdown, XLU dropped -51.98% vs QQQ's -82.97%.

Which ETF is better, XLU or QQQ?

On 10-year performance, QQQ leads with 21.59% vs 8.99% for XLU. On fees, XLU is cheaper at 0.08% per year. On volatility, XLU has been the lower-risk option at 5.60%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLU or QQQ?

Over the 10-year period, QQQ has performed better with a 21.59% return vs 8.99%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLU or QQQ?

XLU is cheaper with a 0.08% expense ratio, compared with 0.18% for QQQ.

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

XLU has the higher dividend yield at 2.73%, compared with 0.39% for QQQ.

What is the main difference between XLU and QQQ?

XLU is categorized as Utilities Equities, while QQQ is Nasdaq-100. XLU tracks Utilities Select Sector Index, while QQQ tracks NASDAQ-100 Index. They also come from different issuers: State Street and Invesco. Their fees differ too: 0.08% for XLU and 0.18% for QQQ.

Which has better risk-adjusted returns?

QQQ currently has the higher Sharpe Ratio (2.15 vs 0.70), 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.