How does FBGRX stack up against QQQ? Which one would you recommend and why?
- FBGRX is a mutual fund from Fidelity. QQQ is an ETF from Invesco.
- FBGRX has an expense ratio of 0.79%, while QQQ is slightly cheaper with an expense ratio of 0.20%.
- Fidelity Blue Chip Growth (FBGRX) invests 80% of assets in well-established and well-capitalized large-cap companies with above-average growth potential.
- Invesco QQQ tracks the Nasdaq 100 index, including the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market.
- Since QQQ is an ETF (exchange-traded fund), it can be traded throughout the day. In contrast, FBGRX can only be transacted at the end of the day.
- QQQ pays dividends on a quarterly basis. FBGRX pays dividends to shareholders every September and December.
- QQQ is more tax efficient in a taxable account than FBGRX.
- Both funds have a minimum initial investment of $0. This means you can start investing with as little as $1.
- Morningstar classified FBGRX and QQQ as “Large Growth.” This means they have similar compositions.
- Their top 10 holdings include Apple, Microsoft, Amazon, Facebook, Tesla, Nvidia, and Google.
|Funds||Fidelity® Blue Chip Growth Fund||Invesco QQQ Trust|
|3-year total return||+38.49%||+38.04%|
|3-year standard deviation||21.03%||18.66%|
|Min. initial investment||0.00||0.00|
|Net expense ratio||0.79%||0.20%|
|Total net assets||52.72bn USD||215.24bn USD|
|Morningstar category||Large Growth||Large Growth|
We asked our community of Fidelity investors and here’s what they have to say about FBGRX and QQQ.
Let’s find out which fund is a better investment for your portfolio.
I own FBGRX but going to switch to QQQ. Their performances are close, but the high fees for FBGRX in the long term will offset any difference and even bring FBGRX returns lower.
FBGRX is what I have in my Roth. It is a solid large-cap option. I have some QQQM in a brokerage account. It is the same as QQQ but with a lower expense.
QQQ/QQQM are NASDAQ focused, whereas FBGRX contains “blue chip” companies from the S&P 500. FBGRX has a higher expense but is actively managed. Depending on where you hold this, there is also significantly more turnover with FBGRX to consider.
QQQ is heavily weighted towards tech stocks. FBGRX is weighted towards what Fidelity deems “blue chips,” which are still a lot of tech stocks but not nearly as heavily so. Long term, unless you expect tech to be a consistent winner, I’d go with FBGRX. You can’t just look at the performance charts. You need to consider the holdings as well.
If tech crashes, it could take a decade for QQQ to recover. I would split between the two funds. The last crash took QQQ about 15 years to recover. That doesn’t deter me though. I find ways to reduce that risk. Such as dollar cost averaging, not putting whole my portfolio in QQQ/M, holding long term, etc.
FBGRX has done very well, but the expense ratio is really high. Fidelity has other funds performing just as well with an expense ratio of 0.03 and below.
FBGRX mutual fund has doubled my investment in the last year, but I would like to change it to an ETF. I was thinking either FZROX or FNILX, but I’m not sure what is best. Fees are pretty high on FBGRX, and I still have a long way before I retire.
Since last year, most funds have gone up significantly due to the Covid crash and subsequent recovery, and FBGRX is no exception. What strikes me about FBGRX is that it grows only with share price appreciation and no dividend. With a higher expense ratio, I would switch to another fund that offers dividends which you can DRIP back into the fund to increase shares by compounding.
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