This ETF Has Outperformed the S&P 500 in 16 of the Past 20 Years. Will This Year Be the Same?
Key Points
The Invesco QQQ Trust ETF (QQQ) and the S&P 500 share 7 of their top 10 holdings.
Down periods in the tech sector hit QQQ harder than the S&P 500.
QQQ has outperformed every year since the 2022 bear market.
The S&P 500 (SNPINDEX: ^GSPC) is typically the benchmark investors use to determine whether a specific investment "outperformed" or "underperformed." Although plenty of Wall Street "experts" assemble and actively manage funds, most of them fail to outperform the S&P 500 over the long term.
One passively managed fund that has had the opposite fortune is the Invesco QQQ Trust ETF (NASDAQ: QQQ). Over the past two decades, it has been one of the better-performing ETFs on the market, and in that span, it has outperformed the S&P 500 16 times.
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With it outperforming the S&P 500 to begin this year (through June 8), is it likely to keep its momentum rolling?
Image source: Getty Images.
A rundown of QQQ's past performance
Here's how QQQ's total returns (which take dividends into account) compare to the S&P 500 over the past 20 years:
| Year | QQQ Total Return | S&P 500 Total Return |
|---|---|---|
| 2025 | 20.8% | 17.9% |
| 2024 | 25.6% | 25% |
| 2023 | 54.9% | 26.3% |
| 2022 | (32.6%) | (18.1%) |
| 2021 | 27.4% | 28.7% |
| 2020 | 48.6% | 18.4% |
| 2019 | 39% | 31.5% |
| 2018 | (0.1%) | (4.4%) |
| 2017 | 32.7% | 21.8% |
| 2016 | 7.1% | 12% |
| 2015 | 9.5% | 1.4% |
| 2014 | 19.1% | 13.7% |
| 2013 | 36.6% | 32.4% |
| 2012 | 18.1% | 16% |
| 2011 | 3.3% | 2.1% |
| 2010 | 20.1% | 15.1% |
| 2009 | 54.7% | 26.5% |
| 2008 | (41.7%) | (37%) |
| 2007 | 19% | 5.5% |
| 2006 | 6.8% | 15.8% |
Data source: YCharts. Table by the author.
Much of QQQ's success has come from the technology boom over the past 20 years. Although it holds companies from almost all non-financial sectors, it has historically been a tech-leaning ETF. As of May 30, the tech sector accounted for 66.9% of QQQ.
What will it take for QQQ to outperform in 2026?
Whether QQQ will outperform the S&P 500 this year will come down to the performance of these seven companies:
- Nvidia
- Apple
- Microsoft
- Alphabet
- Amazon
- Broadcom
- Tesla
They're all among the top 10 holdings of both QQQ and the S&P 500, but the difference lies in how much each leans on them.
| Company | QQQ Weight | S&P 500 Weight |
|---|---|---|
| Nvidia | 8.7% | 7.9% |
| Apple | 7.6% | 6.5% |
| Alphabet | 6.6% | 6.5% |
| Microsoft | 5.6% | 4.9% |
| Amazon | 4.6% | 4.2% |
| Tesla | 3.8% | 1.7% |
| Broadcom | 3% | 3.2% |
Data sources: Invesco and Vanguard. QQQ holdings as of June 5. S&P 500 holdings as of April 30.
These companies account for 39.3% of QQQ, while "only" accounting for 31.9% of the S&P 500. When they're flourishing, QQQ is almost guaranteed to outperform the S&P 500. When they're struggling, the S&P 500 will struggle as well, but not as much.
A good example is June 5, when a big tech sell-off caused QQQ to drop 4.8%, while the S&P 500 fell 2.6%. Of course, that's a small sample size, but the same happened during the 2022 bear market.
What are the chances of QQQ outperforming again?
Nobody can predict how stocks will perform, but I believe QQQ will beat the S&P 500 again this year. There are concerns that tech stock valuations are overinflated and due for a correction, but that's an issue both QQQ and the S&P 500 would have to reckon with.
Even if QQQ underperforms this year, it's still a great long-term investment. If you want to save a bit on fees, invest in its sister fund, the Invesco Nasdaq-100 ETF.
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Stefon Walters has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Broadcom, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
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