QQQ vs SPY: 40 Years of Returns, Drawdowns and What You Actually Own
Same number of up years, +2.55% a year of difference, and one −82.9% hole that decided who was still holding.
The one-line answer
Over the 40 complete calendar years both indices cover (1986–2025), the Nasdaq-100 behind QQQ compounded at +14.0% a year against +11.5% for the S&P 500 behind SPY. Ten thousand dollars became $1,909,101 versus $771,769. The price of that gap was a −82.9% drawdown that took 15.6 years to recover.
Both funds are wrappers: QQQ holds the Nasdaq-100, SPY holds the S&P 500. The table below is index total return, before fund fees and dividend-timing drag, because that is the part with 40 years of clean history on both sides.
1986–2025, side by side
| QQQ (Nasdaq-100) | SPY (S&P 500) | |
|---|---|---|
| Average calendar year | +18.3% | +12.9% |
| Compound annual return (CAGR) | +14.0% | +11.5% |
| $10,000 grown over the window | $1,909,101 | $771,769 |
| Up years | 33 / 40 | 33 / 40 |
| Best year | 1999: +102.0% | 1995: +37.6% |
| Worst year | 2008: −41.9% | 2008: −37.0% |
| Deepest drawdown in the window | −82.9% | −56.8% |
| Years to recover it | 15.6 | 5.5 |
| Bear markets (−20% or worse) | 8 | 5 |
| Forward P/E today | 22.4× | 20.1× |
Two things in that table are usually left out of the comparison. First, the up-year counts are identical — 33 of 40 for both. QQQ does not win more often; it wins bigger, and loses bigger. Second, the +14.0% is an endpoint: the same window measured from the 2000 peak instead of 1986 gives a very different answer, which is what the recovery row is telling you.
QQQ finished ahead in 24 of 40 years (60%). Its widest win was 1999, by 80.9 percentage points; its widest loss 2000, by 27.7 — consecutive years.
Nasdaq-100 annual returns → · S&P 500 annual returns →
What you actually own
QQQ holds 102 positions with $489 billion in assets, and its top ten are 46.27% of the fund — NVDA alone is 8.51%. SPY spreads the same money across roughly 500 names.
| QQQ sector | Weight |
|---|---|
| Technology | 59.15% |
| Telecommunications | 12.70% |
| Consumer Discretionary | 11.11% |
| Consumer Staples | 6.24% |
| Health Care | 4.02% |
| SPY sector | Weight |
|---|---|
| Information Technology | 33.27% |
| Financials | 12.55% |
| Communication Services | 10.37% |
| Consumer Discretionary | 9.76% |
| Health Care | 9.32% |
The two schemes are not the same taxonomy — Nasdaq's "Technology" and GICS "Information Technology" draw the line in different places, and QQQ excludes financials by construction — so read the gap as direction, not as a decimal. The direction is not subtle: one fund is a technology bet with an index around it, the other is the U.S. large-cap market. The S&P 500 is concentrated too, and by its own history more than ever: its largest seven companies are 33.5% of it.
QQQ's full weight ladder → · S&P 500 sector weights → · The Magnificent 7's index weight →
The risk you are paid for
In the 1986–2025 window the Nasdaq-100 had 8 bear markets to the S&P 500's 5. The worst of them, Dotcom bubble, took the index down −82.9% and did not make a new high until 2015-11-03. The S&P 500's worst in the same window, Global financial crisis, was −56.8% and recovered by 2013-03-28.
That is the trade in one paragraph. A +2.55% annual edge over four decades, paid for with a decline that erased four-fifths of the position and 15.6 years of your investing life. Whether that is a good trade depends entirely on whether you would still have been holding in 2015.
Nasdaq-100 drawdown register → · S&P 500 drawdown register →
Valuation and income today
- Forward P/E: Nasdaq-100 22.4× against the S&P 500's 20.1× (2026-09-05). Trailing, 28.1× against 27.2×.
- Income: QQQ's dividend contribution averaged 0.74% a year across 2000–2026. It is a growth wrapper, not an income one.
- Overlap: 6 of QQQ's top ten (NVDA, AAPL, MSFT, AMZN, GOOGL, TSLA) are also among the seven largest companies in the S&P 500, which are 33.5% of it. Holding both funds is less diversification than it looks.
Nasdaq-100 forward P/E → · S&P 500 forward P/E →
How to choose without guessing
- If the honest answer to "would I hold through −80%?" is no, the +14.0% is not available to you. Sold at the trough, QQQ's history is worse than SPY's, not better.
- QQQ is a sector bet with an index label. Sizing it as "my equity allocation" and sizing it as "my technology allocation" are different decisions.
- The window matters more than the ticker. 1986–2025 contains one dot-com collapse and one AI boom. Any comparison that starts in 2003 or 2010 is measuring the recovery, not the round trip.
FAQ
Is QQQ better than SPY?
Over 1986–2025 the Nasdaq-100 compounded at +14.0% a year against +11.5% for the S&P 500, so QQQ’s index won on return. It also fell −82.9% at its worst and took 15.6 years to recover, against −56.8% and 5.5 years. Same up-year count (33 of 40) for both.
How much of QQQ is technology?
Nasdaq’s own breakdown puts 59.15% of QQQ in Technology, with the top ten holdings at 46.27% of the fund. SPY’s published breakdown puts 33.27% in Information Technology. The two use different sector schemes.
Should I hold both QQQ and SPY?
They overlap heavily: 6 of QQQ's ten largest holdings are also among the seven largest companies in SPY, which are 33.5% of that index. Holding both mostly raises the technology weight rather than diversifying it; one S&P 500 fund plus a deliberate technology sleeve is the same exposure, stated honestly.
Index total returns from /api/ndx/annual-tr.json and /api/sp500/annual-tr.json; drawdowns from /api/ndx/drawdowns.json and /api/sp500/drawdowns.json; fund composition from /api/nasdaq/100.json and /api/sp500/sectors.json (State Street SPDR S&P 500 ETF Trust, Index Sector Breakdown as of 2026-04-02). Datasets published 2026-09-05. Index returns exclude fund expenses; 2025 is the last complete calendar year, and 2026 stands at +17.0% vs +13.7% year to date.