Key Points

The Invesco Nasdaq-100 ETF (QQQM) features non-technology firms, while the Vanguard Information Technology ETF (VGT) focuses solely on tech stocks.
Both QQQM and VGT have significantly surpassed broader market returns in recent periods.
VGT omits important growth names such as Alphabet, Amazon, and Meta Platforms.
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Investors hold different views on portfolio construction. Certain individuals value the reliable payouts from dividend equities, whereas others pursue capital appreciation via growth equities. Neither path holds clear superiority, yet growth equities have drawn considerable attention across the past decade.

Growth equities often exhibit volatility, making a growth-oriented ETF an effective route to capture upside while limiting downside. Two widely followed selections are the Invesco Nasdaq-100 ETF (NASDAQ: QQQM) and the Vanguard Information Technology ETF (NYSEMKT: VGT).

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Each has ranked among top-performing ETFs lately, yet which offers the stronger growth profile? The comparison follows.

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Same goal, different approach

Although both ETFs target growth, their methods diverge. QQQM tracks the Nasdaq-100, covering the largest non-financial Nasdaq listings. VGT follows the information technology sector exclusively.

Overlap exists in leading positions. Six of the top ten holdings coincide:

Company	QQQM Weighting	VGT Weighting
Nvidia	8.15%	18.59%
Apple	7.28%	14.81%
Microsoft	5.32%	10.02%
Micron	4.79%	2.62%
Advanced Micro Devices	3.69%	2.58%
Broadcom	3.37%	4.60%

Data sources: Invesco and Vanguard. QQQM percentages as of May 29; VGT as of April 30.

Performance for both depends heavily on these names, yet VGT places even greater emphasis on Nvidia, Apple, and Microsoft, which together exceed 43 percent of assets.

QQQM differs by incorporating non-tech holdings that buffer sector-specific downturns. Technology still dominates at 63.6 percent, but consumer discretionary adds 19.7 percent and supports stability.

Which ETF has been the better performer?

Since VGT launched in January 2004, its record has closely tracked the Nasdaq-100 (QQQM began in October 2020). More recently VGT has led slightly, though both delivered strong results.

ETF	3-Year Annualized Returns	5-Year Annualized Returns	10-Year Annualized Returns
QQQM	28.3%	17.2%	20.1%
VGT	32.1%	21.1%	24.3%

Data source: YCharts. Returns as of market close on May 29. QQQM returns are based on the Nasdaq-100.

Much of the outperformance traces to the AI surge and elevated tech valuations. Strong gains follow when the largest position rises dramatically over five or ten years.

Neither ETF is likely to sustain these exact rates indefinitely, yet both are structured for continued market outperformance.

Which is the better growth ETF right now?

VGT has posted impressive results lately. Year to date it has advanced 28 percent versus QQQM's 20 percent (as of market close on May 29). Even so, QQQM remains the preferred long-term choice for two reasons.

First, sector definitions cause VGT to exclude major growth companies such as Alphabet, Amazon, and Meta Platforms. A true growth ETF should include these established tech leaders with durable competitive advantages and ongoing expansion prospects.

Second, QQQM supplies broader diversification that VGT lacks. While the Magnificent Seven will still sway results, exposure is not concentrated in only a handful of names.

Neither ETF should dominate an entire portfolio, yet QQQM serves well as a core growth allocation.

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Stefon Walters has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Broadcom, Meta Platforms, Micron Technology, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.