XSW vs. QQQ

Last updated Jun 4, 2026

XSW (SPDR S&P Software & Services ETF) and QQQ (Invesco QQQ ETF) are both exchange-traded funds - XSW is a Technology Equities fund tracking the S&P Software & Services Select Industry Index, while QQQ is a Nasdaq-100 fund tracking the NASDAQ-100 Index. Both are passively managed. Over the past 10 years, XSW returned 13.33%/yr vs 21.94%/yr for QQQ. A 0.75 correlation means they provide meaningful diversification when combined. XSW charges 0.35%/yr vs 0.18%/yr for QQQ.

Performance

XSW vs. QQQ - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in SPDR S&P Software & Services ETF (XSW) 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, XSW achieves a -6.38% return, which is significantly lower than QQQ's 21.30% return. Over the past 10 years, XSW has underperformed QQQ with an annualized return of 13.33%, while QQQ has yielded a comparatively higher 21.94% annualized return.

XSW

• 1D: -4.18%
• 1M: 9.35%
• YTD: -6.38%
• 6M: -7.49%
• 1Y: -4.24%
• 3Y*: 11.02%
• 5Y*: 1.69%
• 10Y*: 13.33%

QQQ

• 1D: -0.26%
• 1M: 10.60%
• YTD: 21.30%
• 6M: 19.66%
• 1Y: 41.82%
• 3Y*: 28.78%
• 5Y*: 17.97%
• 10Y*: 21.94%

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

XSW vs. QQQ - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XSW SPDR S&P Software & Services ETF	-6.38%	-0.90%	25.81%	38.60%	-34.22%	7.47%	52.41%	36.50%	7.67%	27.94%
QQQ Invesco QQQ ETF	21.30%	20.77%	25.58%	54.86%	-32.58%	27.42%	48.62%	38.96%	-0.13%	32.66%

Correlation

The correlation between XSW and QQQ is 0.59, 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	0.59
Correlation (3Y) Calculated over the trailing 3-year period	0.69
Correlation (5Y) Calculated over the trailing 5-year period	0.77
Correlation (10Y) Calculated over the trailing 10-year period	0.77
Correlation (All Time) Calculated using the full available price history since Sep 30, 2011	0.75

The correlation between XSW and QQQ shifts across timeframes, from 0.59 (1 year) to 0.77 (10 years), reflecting how their relationship changes across market environments.

XSW vs. QQQ - Sectors Allocation Comparison

Sectors	XSW	QQQ
Technology	86.5%	53.8%
Financial Services	8.1%	0.2%
Communication Services	2.9%	15.8%
Consumer Cyclical	1.0%	12.3%
Industrials	0.8%	2.8%
Healthcare	0.7%	4.2%
Basic Materials	-	1.1%
Consumer Defensive	-	7.7%
Energy	-	0.6%
Real Estate	-	0.1%
Utilities	-	1.4%

Return for Risk

XSW vs. QQQ — Risk / Return Rank

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

XSW

XSW Risk / Return Rank: 7
XSW Sharpe Ratio Rank: 7
XSW Sortino Ratio Rank: 7
XSW Omega Ratio Rank: 7
XSW Calmar Ratio Rank: 7
XSW Martin Ratio Rank: 7

QQQ

QQQ Risk / Return Rank: 73
QQQ Sharpe Ratio Rank: 79
QQQ Sortino Ratio Rank: 75
QQQ Omega Ratio Rank: 74
QQQ Calmar Ratio Rank: 69
QQQ Martin Ratio Rank: 71

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.

XSW vs. QQQ - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for SPDR S&P Software & Services ETF (XSW) 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.

	XSW	QQQ	Difference
Sharpe ratio Return per unit of total volatility	-0.15	2.64	-2.79
Sortino ratio Return per unit of downside risk	-0.01	3.45	-3.46
Omega ratio Gain probability vs. loss probability	1.00	1.45	-0.45
Calmar ratio Return relative to maximum drawdown	-0.13	3.51	-3.64
Martin ratio Return relative to average drawdown	-0.27	13.49	-13.76
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

XSW vs. QQQ - Sharpe Ratio Comparison

The current XSW Sharpe Ratio is -0.15, which is lower than the QQQ Sharpe Ratio of 2.64. The chart below compares the historical Sharpe Ratios of XSW 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

	XSW	QQQ	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	-0.15	2.64	-2.79
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.06	0.81	-0.75
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.51	0.99	-0.48
Sharpe Ratio (All Time) Calculated using the full available price history	0.63	0.41	+0.22

Drawdowns

XSW vs. QQQ - Drawdown Comparison

The maximum XSW drawdown since its inception was -45.38%, smaller than the maximum QQQ drawdown of -82.97%. Use the drawdown chart below to compare losses from any high point for XSW and QQQ.

Drawdown Indicators

	XSW	QQQ	Difference
Max Drawdown Largest peak-to-trough decline	-45.38%	-82.97%	+37.59%
Max Drawdown (1Y) Largest decline over 1 year	-33.75%	-11.96%	-21.79%
Max Drawdown (3Y) Largest decline over 3 years	-33.75%	-22.77%	-10.98%
Max Drawdown (5Y) Largest decline over 5 years	-45.38%	-35.12%	-10.26%
Max Drawdown (10Y) Largest decline over 10 years	-45.38%	-35.12%	-10.26%
Current Drawdown Current decline from peak	-14.64%	-0.26%	-14.38%
Average Drawdown Average peak-to-trough decline	-9.83%	-32.79%	+22.96%
Ulcer Index Depth and duration of drawdowns from previous peaks	15.71%	3.11%	+12.60%

Volatility

XSW vs. QQQ - Volatility Comparison

SPDR S&P Software & Services ETF (XSW) has a higher volatility of 10.68% compared to Invesco QQQ ETF (QQQ) at 4.49%. This indicates that XSW'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

	XSW	QQQ	Difference
Volatility (1M) Calculated over the trailing 1-month period	10.68%	4.49%	+6.19%
Volatility (6M) Calculated over the trailing 6-month period	23.51%	12.10%	+11.41%
Volatility (1Y) Calculated over the trailing 1-year period	28.63%	15.94%	+12.69%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	28.79%	22.38%	+6.41%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	26.25%	22.29%	+3.96%

XSW vs. QQQ - Expense Ratio Comparison

XSW has a 0.35% expense ratio, which is higher than QQQ's 0.18% expense ratio.

Dividends

XSW vs. QQQ - Dividend Comparison

XSW's dividend yield for the trailing twelve months is around 0.04%, less than QQQ's 0.38% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
QQQ Invesco QQQ ETF	0.38%	0.45%	0.56%	0.62%	0.80%	0.43%	0.55%	0.74%	0.91%	0.84%	1.06%	0.99%
XSW SPDR S&P Software & Services ETF	0.04%	0.06%	0.07%	0.20%	0.09%	0.13%	0.26%	0.12%	0.31%	0.46%	0.87%	0.54%

Frequently Asked Questions

Can I hold both XSW and QQQ in my portfolio?

XSW and QQQ have a correlation of 0.59, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XSW or QQQ?

XSW has higher volatility (10.68%) compared to QQQ (4.49%). In terms of maximum drawdown, XSW dropped -45.38% vs QQQ's -82.97%.

Which ETF is better, XSW or QQQ?

On 10-year performance, QQQ leads with 21.94% vs 13.33% for XSW. On fees, QQQ is cheaper at 0.18% per year. On volatility, QQQ has been the lower-risk option at 4.49%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XSW or QQQ?

Over the 10-year period, QQQ has performed better with a 21.94% return vs 13.33%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XSW or QQQ?

QQQ is cheaper with a 0.18% expense ratio, compared with 0.35% for XSW.

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

QQQ has the higher dividend yield at 0.38%, compared with 0.04% for XSW.

What is the main difference between XSW and QQQ?

XSW is categorized as Technology Equities, while QQQ is Nasdaq-100. XSW tracks S&P Software & Services Select Industry Index, while QQQ tracks NASDAQ-100 Index. They also come from different issuers: State Street and Invesco. Their fees differ too: 0.35% for XSW and 0.18% for QQQ.

Which has better risk-adjusted returns?

QQQ currently has the higher Sharpe Ratio (2.64 vs -0.15), 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.