Deciding between QQQ & VGT?

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Benosis
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Deciding between QQQ & VGT?

Post by Benosis »

I'm putting in a tiny portion of my NW and using it as play money. Looking for a high growth EFT that's leaning towards tech. I'm fairly young so I could potentially hold for 25+ years and I'm okay with a little higher risk. Most of my current portfolio is VTSAX & VTIAX.

Both QQQ and VGT have had similar returns. They both have a lot of similar holdings, but VGT has more holdings, lower expense ratio, and pays better dividends. QQQ has a couple big holdings that VGT doesn't: Amazon, Facebook, Google, Netflix. Would a combination of both make sense, i.e. 60% VGT/40% QQQ?

Any idea between the two or any other suggestions with similar risk/reward?
Last edited by Benosis on Sat Sep 12, 2020 2:27 am, edited 4 times in total.
WhiteMaxima
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Re: Deciding between QQQ & VGT?

Post by WhiteMaxima »

I use VGT
retire2022
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Re: Deciding between QQQ & VGT?

Post by retire2022 »

Benosis wrote: Sat Sep 12, 2020 1:22 am
Any idea between the two or any other suggestions with similar risk/reward?
Hi

I'm 60, and currently own VGT 1803 shares, it was 600K on 9/2/2020, it is volatile and best to buy on dips/time the market, I previously discussed this before comparing the two:

viewtopic.php?f=1&t=280668

my reasons why I have it and current discussion on QQQ Versus VGT

viewtopic.php?p=5436621#p5436621
Last edited by retire2022 on Sat Sep 12, 2020 3:38 am, edited 1 time in total.
raiderjkwong
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Re: Deciding between QQQ & VGT?

Post by raiderjkwong »

I am a huge fan of QQQ. Great portfolio of 100 growth stocks.
Topic Author
Benosis
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Re: Deciding between QQQ & VGT?

Post by Benosis »

retire2022 wrote: Sat Sep 12, 2020 3:28 am
Benosis wrote: Sat Sep 12, 2020 1:22 am
Any idea between the two or any other suggestions with similar risk/reward?

I'm 60, and currently own VGT 1803 shares, it was 600K on 9/2/2020, it is volatile and best to buy on dips/time the market

Yup, I saw a bit of a dip in tech stocks the past 2 weeks so I was considering it
deanmoriarty
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Re: Deciding between QQQ & VGT?

Post by deanmoriarty »

Have you considered IETC? I have a small tilt of my portfolio in tech, and found IETC to hold all the tech companies that QQQ and VGT have, combined. It also has a slightly higher concentration in the FAAMG than QQQ, which for me was a plus. It's low volume, but if you are a buy and hold investor it shouldn't matter.

I don't like QQQ because the index itself doesn't make any sense (to me), and it also doesn't hold Visa and Mastercard, which are two fantastic tech-heavy companies. Similarly, I don't like that VGT doesn't include Amazon.
Topic Author
Benosis
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Re: Deciding between QQQ & VGT?

Post by Benosis »

deanmoriarty wrote: Sat Sep 12, 2020 2:54 pm Have you considered IETC? I have a small tilt of my portfolio in tech, and found IETC to hold all the tech companies that QQQ and VGT have, combined. It also has a slightly higher concentration in the FAAMG than QQQ, which for me was a plus. It's low volume, but if you are a buy and hold investor it shouldn't matter.

I don't like QQQ because the index itself doesn't make any sense (to me), and it also doesn't hold Visa and Mastercard, which are two fantastic tech-heavy companies. Similarly, I don't like that VGT doesn't include Amazon.
Yup, I am heavily looking at both IGM & IETC which are VGT with amazon, FB and google
123
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Re: Deciding between QQQ & VGT?

Post by 123 »

In our Roth accounts we've got mostly Vanguard Total Stock Market (VTI) but have also included some QQQ as well as VGT. QQQ and VGT have some differences in what they can include. Both of them can easily be long-term holdings. In our "tilt" allocation we've got 70% QQQ and 30% VGT but I'd be happy with a 50/50 split or 60/40. To me they're each part of the same "tilt" so I'm not in the mood to over-think it. I guess I gave QQQ a higher weight simply to honor the index concept.
The closest helping hand is at the end of your own arm.
Wade Garrett
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Re: Deciding between QQQ & VGT?

Post by Wade Garrett »

Benosis wrote: Sat Sep 12, 2020 3:41 pm I am heavily looking at both IGM & IETC
So basically IGM is the old fund with the high ER and IETC is the new fund with the low ER. This is the sort of thing that ticks me off about iShares. Rather than lower the ER of an existing fund with billions of AUM like Vanguard does, iShares starts a new slightly different fund with a much lower ER in order to trap taxable investors with unrealized gains in the old fund so they have to continue paying the higher ER.
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pasadena
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Re: Deciding between QQQ & VGT?

Post by pasadena »

I find it a little strange to want to invest in tech but avoiding FANG stocks. Unless one has something against these companies specifically?
asif408
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Re: Deciding between QQQ & VGT?

Post by asif408 »

Since you are chasing performance, I would chase VGT. They've both beaten US total stock market, but VGT has outperformed QQQ by about 4% CAGR over the last 5 years: https://www.portfoliovisualizer.com/bac ... ion3_3=100

So when things go south, VGT will probably fall the hardest. But until then you can ride the gravy train.
MotoTrojan
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Re: Deciding between QQQ & VGT?

Post by MotoTrojan »

Good luck. These funds have idiosyncratic risk, which is uncompensated risk. Just because they have done well the last 10 years doesn't mean it will continue. Investing in what has done best recently is a good way to lose, but maybe I am just a contrarian.

Personally if you like these types of companies, I think something like MTUM is a better high-risk high-reward bet. Currently it looks like a tech fund, but may not in the future depending on what sectors have the highest momentum. Momentum historically is the best performing factor, and has actual academic rationales for continued outperformance (albeit with massive drawdowns, which we are currently digging ourselves out of even now: https://www.twocenturies.com/blog/2019/ ... data-today).
Big Dog
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Re: Deciding between QQQ & VGT?

Post by Big Dog »

pasadena wrote: Mon Sep 14, 2020 4:43 pm I find it a little strange to want to invest in tech but avoiding FANG stocks. Unless one has something against these companies specifically?
That's why I hold VITAX (Technology Fund) and US Growth (VWUAX) with LT play money; the latter even includes a piece of TSLA. Both accounts in Roth, which I plan on leaving to heirs.
Cruise
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Re: Deciding between QQQ & VGT?

Post by Cruise »

I had a lot of QQQ in my portfolio and realized vastly superior performance compared to any other holding. However, about six months ago I sold my tax-advantaged holdings and placed them in total or S&P500 accounts in order to further diversify.
pasadena
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Re: Deciding between QQQ & VGT?

Post by pasadena »

asif408 wrote: Mon Sep 14, 2020 4:46 pm Since you are chasing performance, I would chase VGT. They've both beaten US total stock market, but VGT has outperformed QQQ by about 4% CAGR over the last 5 years: https://www.portfoliovisualizer.com/bac ... ion3_3=100

So when things go south, VGT will probably fall the hardest. But until then you can ride the gravy train.
But then, QQQ is slightly ahead if you look at the last 10 years, and even more since 2004 (start of available data). We know nothing :)
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anon_investor
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Re: Deciding between QQQ & VGT?

Post by anon_investor »

I do 50/50 VGT/VUG (Vanguard Growth Index ETF) for my play money allocation.
Robert20
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Re: Deciding between QQQ & VGT?

Post by Robert20 »

deanmoriarty wrote: Sat Sep 12, 2020 2:54 pm Have you considered IETC? I have a small tilt of my portfolio in tech, and found IETC to hold all the tech companies that QQQ and VGT have, combined. It also has a slightly higher concentration in the FAAMG than QQQ, which for me was a plus. It's low volume, but if you are a buy and hold investor it shouldn't matter.

I don't like QQQ because the index itself doesn't make any sense (to me), and it also doesn't hold Visa and Mastercard, which are two fantastic tech-heavy companies. Similarly, I don't like that VGT doesn't include Amazon.
why do u want to invest in smaller funds? IETC has just 88M market cap... I would stay away from those funds..

Go with VGT or QQQ.
chassis
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Re: Deciding between QQQ & VGT?

Post by chassis »

I have QQQ and am pretty satisfied.

I also have FTEC and FDGRX. FDGRX is my best investment for the past 25 years. It is still available in some plans, although as a general statement it is closed to new investors.
retire2022
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Re: Deciding between QQQ & VGT?

Post by retire2022 »

Op old thread on this but they got a hit March 23, 2020!

viewtopic.php?t=308865
asif408
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Re: Deciding between QQQ & VGT?

Post by asif408 »

pasadena wrote: Mon Sep 14, 2020 4:56 pm But then, QQQ is slightly ahead if you look at the last 10 years, and even more since 2004 (start of available data). We know nothing :)
Yea, I noticed that. But he should chase the most recent winner. 10 years is old.
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TheTimeLord
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Re: Deciding between QQQ & VGT?

Post by TheTimeLord »

Benosis wrote: Sat Sep 12, 2020 1:22 am I'm putting in a tiny portion of my NW and using it as play money. Looking for a high growth EFT that's leaning towards tech. I'm fairly young so I could potentially hold for 25+ years and I'm okay with a little higher risk. Most of my current portfolio is VTSAX & VTIAX.

Both QQQ and VGT have had similar returns. They both have a lot of similar holdings, but VGT has more holdings, lower expense ratio, and pays better dividends. QQQ has a couple big holdings that VGT doesn't: Amazon, Facebook, Google, Netflix. Would a combination of both make sense, i.e. 60% VGT/40% QQQ?

Any idea between the two or any other suggestions with similar risk/reward?
You might consider throwing MGK and XLK into the mix also if you are leaning the single ETF way. The way I have executed this is sort of thing is by using XLC, XLK and XLY sort of thing.
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Valuethinker
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Re: Deciding between QQQ & VGT?

Post by Valuethinker »

Benosis wrote: Sat Sep 12, 2020 1:22 am I'm putting in a tiny portion of my NW and using it as play money. Looking for a high growth EFT that's leaning towards tech. I'm fairly young so I could potentially hold for 25+ years and I'm okay with a little higher risk. Most of my current portfolio is VTSAX & VTIAX.

Both QQQ and VGT have had similar returns. They both have a lot of similar holdings, but VGT has more holdings, lower expense ratio, and pays better dividends. QQQ has a couple big holdings that VGT doesn't: Amazon, Facebook, Google, Netflix. Would a combination of both make sense, i.e. 60% VGT/40% QQQ?

Any idea between the two or any other suggestions with similar risk/reward?
Why not hold Vanguard Total Stock Market, which has the highest chance of holding the *next* Google, Microsoft, Apple, etc?

One of the Fidelity actively managed funds has quite a few unlisted tech company holdings, I believe.
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Nicolas
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Re: Deciding between QQQ & VGT?

Post by Nicolas »

Valuethinker wrote: Tue Sep 15, 2020 8:25 am Why not hold Vanguard Total Stock Market, which has the highest chance of holding the *next* Google, Microsoft, Apple, etc?
This sounds good but the next Google, Microsoft, etc. isn’t going to move the needle much in Total Stock Market, is it? It’s so diversified how could it make much difference?
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TheTimeLord
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Re: Deciding between QQQ & VGT?

Post by TheTimeLord »

Nicolas wrote: Tue Sep 15, 2020 8:55 am
Valuethinker wrote: Tue Sep 15, 2020 8:25 am Why not hold Vanguard Total Stock Market, which has the highest chance of holding the *next* Google, Microsoft, Apple, etc?
This sounds good but the next Google, Microsoft, etc. isn’t going to move the needle much in Total Stock Market, is it? It’s so diversified how could it make much difference?
Long term they probably will as they grow larger and larger but you probably won't be hurt as much by the next Webvan or Pets.com.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]
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