SPY vs QQQ: Which ETF Should You Own in 2026?
SPY and QQQ are the two most-traded ETFs on earth. SPY tracks the S&P 500. QQQ tracks the Nasdaq 100. They sound similar, move together most of the time, but diverge sharply in rate cycles and tech corrections. Here's what actually matters when choosing between them.
QQQ's concentration in mega-cap tech has been a feature for most of the past decade — it returned roughly double SPY's gains during the 2023–2024 AI bull run. But in 2022's rate-hike environment, QQQ fell 35% while SPY fell 19%, proving the spread cuts both ways. The right choice depends less on which ETF is "better" and more on how much tech concentration risk you're willing to carry — both APEX composite scores above reflect today's technical momentum for each.
What You're Actually Buying
SPY is the S&P 500 — the 500 largest publicly-traded US companies by market cap. You get Apple, Microsoft, Nvidia, Amazon, Meta, but also JPMorgan, ExxonMobil, Johnson & Johnson, Berkshire Hathaway, and Costco. It's a genuine cross-section of the US economy.
QQQ is the Nasdaq 100 — the 100 largest non-financial companies listed on the Nasdaq exchange. In practice, this means heavy tech: the top 5 holdings (Apple, Microsoft, Nvidia, Amazon, Broadcom) alone represent around 40% of QQQ. And the Nasdaq screens out financial companies entirely — no banks, no insurance companies, no REITs.
- 500 companies, all US sectors
- ~32% tech allocation
- Includes financials, energy, healthcare
- Lower volatility in downturns
- 0.0945% expense ratio
- Most liquid ETF in the world
- 100 companies, Nasdaq-listed
- ~60%+ tech allocation
- Zero financial sector exposure
- Higher returns in bull markets
- 0.20% expense ratio
- Second most liquid ETF worldwide
Performance: When Each Wins
QQQ has outperformed SPY significantly over the last 15 years — largely because tech has dominated the market during that period. In bull markets with low interest rates, QQQ's tech concentration is a feature, not a bug. When rates fall, high-multiple tech stocks benefit disproportionately, and QQQ's concentration amplifies that.
In 2022, when the Fed hiked rates aggressively, QQQ fell about 33% while SPY fell about 18%. That 15-point gap matters if you're close to retirement or have a shorter time horizon. The more concentrated you are in tech (QQQ), the bigger the swings in both directions.
The practical takeaway: if you're a long-term investor with 10+ years, either ETF has delivered strong returns. If you're sensitive to drawdowns or have a shorter horizon, SPY's diversification offers a smoother ride.
The Correlation Reality
SPY and QQQ have a correlation of around 0.90+ most of the time. They largely move together — both up on good macro days, both down on bad ones. The divergence that matters happens in specific environments: rising rate cycles (QQQ lags), tech-specific selloffs (QQQ lags), or financial sector rallies (SPY leads because QQQ has no financials).
If you own both, you're getting some diversification benefit but not as much as the two distinct names suggest. A 60/40 SPY/QQQ portfolio is still ~70% tech in character.
Who Should Own Which
APEX scores both ETFs daily — RSI, MACD, trend, volume, and 52-week position — combined into one composite score. See which has stronger momentum right now.
Compare SPY vs QQQ Live →