Invesco QQQ Trust (QQQ) owns 29.22% of its assets in just four companies led by Nvidia with 9.89%.
QQQ charges an expense ratio of 0.20% and focuses heavily on technology exposure.
SPDR Dow Jones Industrial Average ETF (DIA) has 30 blue-chip stocks with Goldman Sachs as its largest holding at 10.4%.
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He Invesco QQQ Trust (NASDAQ:QQQ), SPDR S&P 500 ETF (NYSEARCA:SPY) and the SPDR Dow Jones Industrial Average ETF Trust (NYSEARCA:DIA) They are among the largest ETFs on the market, each following a different theme. Most investors have a combination of these ETFs in their portfolios in different proportions.
There are also investors who choose one of those three as their main holding and then choose satellite holdings to complement that main ETF.
Whatever type of investor you are, it’s a good idea to take a closer look at these three ETFs and determine which one is worth having more exposure to. It is also important to be aware that the market is constantly evolving. Making investment decisions by analyzing which ETFs have performed well in the recent past can lead to difficulties.
The QQQ has gained the most among the three in recent history, thanks to the technology companies that lead the US economy. The Nasdaq-100 is packed with tech companies that have doubled every two to three years.
The ETF tracks the performance of the Nasdaq-100 index and gives you exposure to all of the largest non-financial companies listed on the Nasdaq as is. The passive nature allows QQQ to have an expense ratio of only 0.20%, or $20 per $10,000. This is one of the cheapest ways to gain exposure to technology companies and outperform the market, assuming technological dominance continues.
Unfortunately, there is no guarantee that this is the case. The main holdings of QQQ are Nvidia (NASDAQ:NVDA) at 9.89%, Microsoft (NASDAQ:MSFT) at 7.96%, Broadcom (NASDAQ:AVGO) at 5.77% and Amazon (NASDAQ:AMZN) at 5.6%. These four companies alone make up 29.22% of the entire ETF. Exposure to AI may work if the rally continues indefinitely, but with some hyperscalers burning through their cash reserves and depreciation catching up, the narrative that AI will make a lasting recovery is in limbo. QQQ is likely to significantly underperform if the market begins to correct.
However, if you’re young and looking to stick around for decades and weather the storm, it’s worth having QQQ as your biggest holding. Technology is unlikely to stop being the growth engine of the US economy.
The S&P 500 has long been considered the best place to invest your money. And that’s probably still the case today, but the ETF has increasingly tilted toward a narrow group of tech companies. It’s not as concentrated as QQQ, but Nvidia still makes up 8.07% of the ETF. Microsoft has a weighting of 6.47%, followed by Amazon with 4.14%. That’s about 18.68% of the ETF in just three AI-heavy plays.
That’s great if you’re a firm believer in AI, but if your portfolio has both SPY and QQQ and perhaps some AI ETFs, the overlapping exposure to AI can leave you vulnerable.
The SPY has an expense ratio of 0.09%, or $9 per $10,000. If you are not worried about liquidity and slippage, you can buy the State Street SPDR S&P 500 ETF Portfolio (NYSEARCA:SPYM). It has an expense ratio of 0.02% or just $2 per $10,000.
The DIA ETF is the most “defensive” of the three and looks the most attractive in the current environment. The ETF tracks the performance of the Dow Jones Industrial Average (DJIA), one of the oldest and most recognized stock market indices. DIA maintains the 30 blue-chip stocks that make up the Dow Jones Industrial Average in their corresponding weightings.
The largest share here is Goldman Sachs (NYSE:GS) with 10.4%, followed by Caterpillar (NYSE: CAT) 7.29%, Microsoft with 6.53%, Home Depot (NYSE:HD) at 4.8%, and American Express (NYSE: AXP) at 4.75%. The 4 blue-chip non-AI stocks will add some much-needed ballast to your portfolio if you are heavily exposed to QQQ and SPY.
DIA yields 1.4% and distributes dividends monthly. The expense ratio is the highest of the group, at 0.16%, or $16 per $10,000.
If you’re in your 20s and 30s and can afford to take a 30-40% drop from here if the AI ​​narrative fails, maintaining a strong QQQ/SPY tilt is fine, given that it also has some ties. Technology is unlikely to fail you in the long run.
If you do not meet that criteria, it would be best to increase exposure to DIA. There is a serious risk that the technological rebound will falter in the coming quarters. It also helps offset your portfolio’s overexposure to just a handful of AI stocks. DIA is likely to outperform both QQQ and SPY if the market has a 2026 in the red. DIA’s historical declines have been much shallower.
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