XLY vs. QQQ

Last updated Aug 2, 2026

XLY (Consumer Discretionary Select Sector SPDR Fund) and QQQ (Invesco QQQ ETF) are both exchange-traded funds - XLY is a Consumer Discretionary Equities fund tracking the Consumer Discretionary Select Sector Index, while QQQ is a Nasdaq-100 fund tracking the NASDAQ-100 Index. Both are passively managed. Over the past 10 years, XLY returned 12.33%/yr vs 20.44%/yr for QQQ. Their 0.73 correlation means they have sometimes moved together and sometimes differently. XLY charges 0.13%/yr vs 0.18%/yr for QQQ.

Performance

XLY vs. QQQ - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Consumer Discretionary Select Sector SPDR Fund (XLY) 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, XLY achieves a -2.39% return, which is significantly lower than QQQ's 12.26% return. Over the past 10 years, XLY has underperformed QQQ with an annualized return of 12.33%, while QQQ has yielded a comparatively higher 20.44% annualized return.

XLY

• 1D: 3.29%
• 1M: -0.88%
• 6M: -3.81%
• YTD: -2.39%
• 1Y: 8.28%
• 3Y*: 11.47%
• 5Y*: 6.04%
• 10Y*: 12.33%
• ALL TIME*: 9.58%

QQQ

• 1D: 0.65%
• 1M: -3.45%
• 6M: 10.89%
• YTD: 12.26%
• 1Y: 24.81%
• 3Y*: 22.29%
• 5Y*: 14.23%
• 10Y*: 20.44%
• ALL TIME*: 10.64%

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

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
QQQ Invesco QQQ ETF	$30.32B	$28.40B	$31.45B
XLY Consumer Discretionary Select Sector SPDR Fund	$945.87M	$987.54M	$948.83M

XLY vs. QQQ - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLY Consumer Discretionary Select Sector SPDR Fund	-2.39%	7.37%	26.51%	39.64%	-36.27%	27.93%	29.63%	28.39%	1.58%	22.82%
QQQ Invesco QQQ ETF	12.26%	20.77%	25.58%	54.86%	-32.58%	27.42%	48.62%	38.96%	-0.13%	32.66%

Correlation

The correlation between XLY and QQQ is 0.67, which is moderate. They have sometimes moved together and sometimes differently, sharing some price drivers without tracking each other closely.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.67
Correlation (3Y) Balances recent behavior with more history.	0.75
Correlation (5Y) Shows whether the relationship held over a longer period.	0.82
Correlation (10Y) Provides a long-term view across more market conditions.	0.81
Correlation (All Time) Calculated using the full available price history since Mar 10, 1999	0.73

The correlation between XLY and QQQ shifts across timeframes, from 0.67 (1 year) to 0.82 (5 years), reflecting how their relationship changes across market environments.

XLY vs. QQQ - Sectors Allocation Comparison

Sectors	XLY	QQQ
Consumer Cyclical	97.1%	10.7%
Communication Services	1.7%	13.1%
Technology	1.1%	60.9%
Industrials	0.1%	2.7%
Basic Materials	-	1.0%
Consumer Defensive	-	6.3%
Energy	-	0.5%
Financial Services	-	0.2%
Healthcare	-	3.6%
Real Estate	-	0.1%
Utilities	-	1.1%

Return for Risk

XLY vs. QQQ — Risk / Return Rank

Compare historical risk-adjusted metric ranks over the past 12 months.

XLY

XLY Risk / Return Rank: 17
XLY Sharpe Ratio Rank: 17
XLY Sortino Ratio Rank: 17
XLY Omega Ratio Rank: 17
XLY Calmar Ratio Rank: 17
XLY Martin Ratio Rank: 18

QQQ

QQQ Risk / Return Rank: 49
QQQ Sharpe Ratio Rank: 47
QQQ Sortino Ratio Rank: 46
QQQ Omega Ratio Rank: 45
QQQ Calmar Ratio Rank: 53
QQQ Martin Ratio Rank: 52

The rank (0–100) uses a weighted average of the Sharpe, Sortino, Omega, Calmar, and Martin percentile ranks for the trailing 12 months. Higher means stronger historical risk-adjusted performance within the peer group.

XLY vs. QQQ - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Consumer Discretionary Select Sector SPDR Fund (XLY) 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.

	XLY	QQQ	Difference
Sharpe ratio: Return per unit of total volatility	0.29	1.16	-0.87
Sortino ratio: Return per unit of downside risk	0.54	1.65	-1.11
Omega ratio: Gain probability vs. loss probability	1.06	1.21	-0.14
Calmar ratio: Return relative to maximum drawdown	0.38	1.88	-1.50
Martin ratio: Return relative to average drawdown	1.03	6.00	-4.97

XLY vs. QQQ - Sharpe Ratio Comparison

The current XLY Sharpe Ratio is 0.29, which is lower than the QQQ Sharpe Ratio of 1.16. The chart below compares the historical Sharpe Ratios of XLY 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

XLY vs. QQQ - Drawdown Comparison

The maximum XLY drawdown since its inception was -59.05%, smaller than the maximum QQQ drawdown of -82.97%. Use the drawdown chart below to compare losses from any high point for XLY and QQQ.

Drawdown Indicators

	XLY	QQQ	Difference
Max Drawdown Largest peak-to-trough decline	-59.05%	-82.97%	+23.92%
Max Drawdown (1Y) Largest decline over 1 year	-14.98%	-11.96%	-3.02%
Max Drawdown (3Y) Largest decline over 3 years	-26.01%	-22.77%	-3.24%
Max Drawdown (5Y) Largest decline over 5 years	-39.67%	-35.12%	-4.55%
Max Drawdown (10Y) Largest decline over 10 years	-39.67%	-35.12%	-4.55%
Current Drawdown Current decline from peak	-6.40%	-7.69%	+1.29%
Average Drawdown Average peak-to-trough decline	-9.54%	-32.62%	+23.08%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.53%	3.74%	+1.79%

Volatility

XLY vs. QQQ - Volatility Comparison

Consumer Discretionary Select Sector SPDR Fund (XLY) has a higher volatility of 7.28% compared to Invesco QQQ ETF (QQQ) at 6.87%. This indicates that XLY's price experiences larger fluctuations and is considered to be riskier than QQQ based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLY	QQQ	Difference
Volatility (1M) Calculated over the trailing 1-month period	7.28%	6.87%	+0.41%
Volatility (6M) Calculated over the trailing 6-month period	15.04%	16.08%	-1.04%
Volatility (1Y) Calculated over the trailing 1-year period	19.53%	19.38%	+0.15%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	24.07%	22.90%	+1.17%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.18%	22.50%	-0.32%

XLY vs. QQQ - Expense Ratio Comparison

XLY 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

XLY vs. QQQ - Dividend Comparison

XLY's dividend yield for the trailing twelve months is around 0.78%, more than QQQ's 0.44% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
QQQ Invesco QQQ ETF	0.44%	0.45%	0.56%	0.62%	0.80%	0.43%	0.55%	0.74%	0.91%	0.84%	1.06%	0.99%
XLY Consumer Discretionary Select Sector SPDR Fund	0.78%	0.79%	0.72%	0.78%	1.00%	0.53%	0.82%	1.28%	1.34%	1.20%	1.71%	1.43%

Frequently Asked Questions

Can I hold both XLY and QQQ in my portfolio?

XLY and QQQ have a correlation of 0.67, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XLY or QQQ?

XLY has higher volatility (7.28%) compared to QQQ (6.87%). In terms of maximum drawdown, XLY dropped -59.05% vs QQQ's -82.97%.

Which ETF is better, XLY or QQQ?

On 10-year performance, QQQ leads with 20.44% vs 12.33% for XLY. On fees, XLY is cheaper at 0.13% per year. On volatility, QQQ has been the lower-risk option at 6.87%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLY or QQQ?

Over the 10-year period, QQQ has performed better with a 20.44% return vs 12.33%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLY or QQQ?

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

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

XLY has the higher dividend yield at 0.78%, compared with 0.44% for QQQ.

What is the main difference between XLY and QQQ?

XLY is categorized as Consumer Discretionary Equities, while QQQ is Nasdaq-100. XLY tracks Consumer Discretionary 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 XLY and 0.18% for QQQ.

Which has better risk-adjusted returns?

QQQ currently has the higher Sharpe Ratio (1.16 vs 0.29), 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.