What would be a better growth/ tech leaning ETF, QQQ or VUG?

VUG tracks the CRSP US Large Cap Growth Index. This means it only tracks US companies that are large-cap and above that fall under the Growth category.

QQQ tracks the Nasdaq-100 index, which includes 100 of the largest US and international non-financial companies listed on the Nasdaq based on market cap.

There are correlations in terms of performance based on the past 10 years. Both experiences correlated negative returns and positive returns. I think QQQ might be a better choice if we are basing it purely on returns.

If you are a buy-and-hold investor, you are better off with QQQM (launched on 13 Oct 2020). It is a cheaper version of the QQQ. QQQM has an expense ratio of 0.15% whereas QQQ is 0.2%. However, it has a lower daily trading volume than QQQ.

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Holdings wise, VUG is purely focused on growth stocks whereas QQQ is mostly comprised of tech stocks, which just happen to be growth oriented as well. In terms of geographic diversification, VUG is a pure US play whereas QQQ allocates some funds to international companies, though not much. Lastly, I believe VUG has more sector diversifcation as compared to QQQ. Overall, though, you will find that both funds have quite a few overlapping holdings. So in terms of holdings, I would say there isn't very much difference between them apart from the slight diversifaction differences.

Cost wise, VUG has the upperhand with a lower expense ratio compared to QQQ, (0.04% vs 0.20%). However, if you look at the chart in Choong Hwee's post, you do see that the returns of QQQ have been higher than that of VUG's and essentially making up for the higher expenses incurred.

Overall, I would say go with QQQ if your underweight tech but if you prefer more diversification, VUG would be the choice. Additionally, if you are considering holding QQQ long-term, I would recommend going with QQQM, which is essentially the same as QQQ just less liquid due to it being a new fund but with a lower expense ratio (0.15%). Another fund of interest to you may be VGT, which is Vanguard's information technology ETF.

Hope this was helpful & all the best with your investments!​​​