The Invesco QQQ Trust (NASDAQ:QQQ | QQQ Price Prediction), SPDR S&P 500 ETF (NYSEARCA:SPY) and the SPDR Dow Jones Industrial Average ETF Trust (NYSEARCA:DIA) are among the market’s biggest ETFs, each tracking a different theme. Most investors hold a blend of these ETFs in their portfolios in different proportions.
There are also investors who pick one of those three as their core holding, then pick satellite holdings to complement that core ETF.
Whichever type of investor you may be, it’s a good idea to take a closer look at all three of these 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 looking at which ETFs have done well in the recent past can lead to pitfalls.
Invesco QQQ Trust (QQQ)
The QQQ has been the biggest gainer among the three in recent history, thanks to tech companies spearheading the U.S. economy. The Nasdaq-100 is packed with the tech companies that have been doubling 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 just 0.20%, or $20 per $10,000. This is one of the cheapest ways to get exposure to tech companies and outperform the market, assuming tech dominance continues.
Unfortunately, there’s no guarantee this will be the case. The top holdings of the 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 constitute 29.22% of the entire ETF. AI exposure can work out if the rally continues indefinitely, but with some hyperscalers burning through their cash reserves and depreciation catching up, the narrative that AI will rally enduringly is in limbo. QQQ is likely to significantly underperform if the market starts correcting.
Nonetheless, if you’re young and looking to hold for decades and ride out the storm, QQQ is worth having as your biggest holding. Tech is unlikely to stop being the growth engine of the U.S. economy.
SPDR S&P 500 ETF (SPY)
The S&P 500 has long been considered the best place to put your money. And that likely remains the case today, but the ETF has been leaning heavier and heavier into a narrow group of tech companies. It’s not as concentrated as the QQQ, but Nvidia still constitutes 8.07% of the ETF. Microsoft has a 6.47% weighting, followed by Amazon at 4.14%. That’s around 18.68% of the ETF in just three AI-heavy plays.
That’s great if you’re a strong believer in AI, but if your portfolio holds both the SPY and the 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 Portfolio S&P 500 ETF (NYSEARCA:SPYM). It carries a 0.02% expense ratio or just $2 per $10,000.
SPDR Dow Jones Industrial Average ETF Trust (DIA)
The DIA ETF is the most “defensive” of the three and is looking more appealing in the current environment. The ETF tracks the performance of the Dow Jones Industrial Average (DJIA), one of the oldest and most widely recognized stock market indices. DIA holds the 30 blue-chip stocks that comprise the Dow Jones Industrial Average in their appropriate weightings.
The biggest holding here is Goldman Sachs (NYSE:GS) at 10.4%, followed by Caterpillar (NYSE:CAT) 7.29%, Microsoft at 6.53%, Home Depot (NYSE:HD) at 4.8%, and American Express (NYSE:AXP) at 4.75%. The 4 non-AI blue-chip stocks will add much-needed ballast to your portfolio if you are heavily exposed to QQQ and the SPY.
DIA yields 1.4% and distributes its dividends monthly. The expense ratio is the highest of the bunch at 0.16%, or $16 per $10,000.
Which ETF Should You Buy?
If you are in your 20s or 30s and you can afford to take a 30-40% slide from here if the AI narrative fails, maintaining a heavily QQQ/SPY tilt is fine, given that you also hold some bonds. Tech is unlikely to fail you in the long run.
If you don’t fit that criteria, it would be better to increase exposure to DIA. There’s a serious risk of the tech rally faltering in the next few quarters. It also helps counteract overexposing your portfolio to just a handful of AI stocks. DIA is likely to outperform both QQQ and the SPY if the market has a red 2026. DIA’s historical drawdowns have been much shallower.
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