Explore how each ETF’s unique portfolio construction shapes risk, sector exposure, and potential fit for different investment goals.
Sara Appino, The Motley Fool
4 min read
The Invesco QQQ Trust (NASDAQ:QQQ) and iShares Russell 2000 Growth ETF (NYSEMKT:IWO) differ most in market cap focus and sector allocation—QQQ leans into large-cap tech, while IWO broadens exposure to small-cap growth, with IWO charging a modestly higher expense ratio.
Both QQQ and IWO offer exposure to U.S. growth equities, but their approaches diverge sharply: QQQ tracks the tech-heavy Nasdaq-100, favoring established giants, while IWO taps into the Russell 2000 Growth Index for small-cap growth opportunities. This comparison looks at cost, performance, risk, and portfolio makeup to help clarify which may appeal for different objectives.
| Metric | QQQ | IWO |
|---|---|---|
| Issuer | Invesco | iShares |
| Expense ratio | 0.18% | 0.24% |
| 1-yr return (as of 2026-04-16) | 44.9% | 46.5% |
| Dividend yield | 0.4% | 0.4% |
| Beta | 1.19 | 1.18 |
| AUM | $372.5 billion | $12.2 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.
IWO comes with a slightly higher expense ratio than QQQ, making QQQ more affordable for long-term holders. Both funds offer a modest 0.4% yield, so neither stands out for income-seeking investors.
| Metric | QQQ | IWO |
|---|---|---|
| Max drawdown (5 y) | -35.12% | -40.51% |
| Growth of $1,000 over 5 years | $1,947 | $1,198 |
IWO has experienced a deeper five-year maximum drawdown than QQQ, reflecting higher risk, and delivered significantly less growth over the past five years despite a recent one-year performance edge. This highlights the more volatile nature of small-cap growth stocks compared to large-cap tech leaders.
IWO tracks small-cap U.S. companies with growth characteristics, holding over 1,100 stocks—far broader than many growth ETFs. Its sector mix skews toward healthcare (25%), technology (22%), and industrials (21%), with top positions like Bloom Energy (NYSE:BE), Credo Technology Group (NASDAQ:CRDO), and Fabrinet (NYSE:FN), none exceeding a 3% weight. With a fund age of nearly 26 years, IWO offers seasoned exposure to the small-cap growth space.
QQQ, in contrast, concentrates on large, established U.S. companies, with more than half the portfolio in technology and notable weights in communication services and consumer cyclicals. Its top holdings—Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT)—dominate the fund, lending it a pronounced megacap tilt and less diversification by number of holdings compared to IWO.
For more guidance on ETF investing, check out the full guide at this link.