Nasdaq 100 vs Russell 2000
QQQ closed near $656 in mid-April 2026 with year-to-date return approximately 1 percent. IWM (iShares Russell 2000) gained 11.7 percent month-to-date in April 2026, bringing year-to-date to approximately 11.8 percent.
Also known as: Nasdaq 100 ETF (QQQ) (ETF_QQQ, Nasdaq, NDX) · Russell 2000 ETF (IWM) (ETF_IWM, Russell 2000, RUT)
Why This Comparison Matters
QQQ closed near $656 in mid-April 2026 with year-to-date return approximately 1 percent. IWM (iShares Russell 2000) gained 11.7 percent month-to-date in April 2026, bringing year-to-date to approximately 11.8 percent. The 10.8 percentage point IWM-vs-QQQ outperformance year-to-date is one of the largest small-vs-large divergences in recent years. Since August 2025, IWM has gained 28 percent versus QQQ approximately 12 percent (16 percentage point IWM outperformance over 8 months). The pair captures the most extreme growth-vs-value rotation in equity markets: QQQ is dominated by mega-cap tech (Apple, Microsoft, Nvidia, Google, Amazon, Meta, Tesla combined ~50 percent of QQQ); IWM contains 2,000 small caps with no mega-cap names and 70 percent domestic revenue exposure.
The 2026 Rotation Story
IWM rallied 11.7 percent in April 2026, the best month since 2023. The catalysts: Iran ceasefire negotiations progressing, oil prices retracing toward $95 from $105 peak, and Fed rate-cut expectations resetting toward 2-3 cuts in 2026. The combination produced a textbook small-cap-vs-tech rotation: small caps benefited from rate-cut anticipation and risk-on sentiment while QQQ faced AI capex translation questions and Iran-related defensive flight to mega-caps had already played out.
The 10.8 percentage point YTD divergence (IWM +11.8% vs QQQ +1%) is unusual but not unprecedented. The 2009 small-cap rebound saw IWM outperform QQQ by 25+ percentage points in select months. The 2020 small-cap recovery saw similar magnitudes. The current rotation could continue if Iran resolves and Fed cuts deliver, or could reverse if Iran escalates or Fed delays cuts.
QQQ Composition vs IWM
QQQ holds approximately 100 stocks tracking the Nasdaq 100 index. The top 10 holdings represent approximately 50 percent of QQQ assets: Apple ~9 percent, Microsoft ~7 percent, Nvidia ~9 percent, Amazon ~6 percent, Google (Alphabet Class A and C combined ~6 percent), Meta ~5 percent, Tesla ~4 percent, Broadcom ~4 percent, Costco ~3 percent. The Magnificent 7 alone represents approximately 50 percent of QQQ.
IWM holds 2,000 small-cap stocks with median market cap approximately $1 billion. No single holding exceeds 0.5 percent of fund assets. The sector composition: Financials ~17 percent, Industrials 15 percent, Healthcare 14 percent, Tech 13 percent, Consumer Discretionary 11 percent, Energy 6 percent.
The two ETFs have radically different characteristics. QQQ is concentrated mega-cap growth with global revenue (international ~50 percent); IWM is diversified small-cap with domestic revenue (US ~70 percent). The pair trade therefore captures growth-vs-value, large-vs-small, and global-vs-domestic factors simultaneously.
The Multi-Factor Rotation
QQQ-vs-IWM is the cleanest expression of three factor rotations simultaneously. First, growth vs value: QQQ is heavily growth-tilted (Nasdaq 100 P/E approximately 28x); IWM is more value-tilted (Russell 2000 P/E approximately 18x). Second, large vs small: QQQ average market cap approximately $750 billion; IWM median $1 billion (700x size differential). Third, global vs domestic: QQQ international revenue ~50 percent; IWM ~30 percent.
Conditional Forward Response (Tail Events)
How Russell 2000 ETF (IWM) has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in Nasdaq 100 ETF (QQQ). Computed from 1,287 aligned daily observations ending .
Following these triggers, Russell 2000 ETF (IWM) falls 0.32% on average over the next 5 sessions, versus an unconditional baseline of +0.15%. 129 qualifying events; Russell 2000 ETF (IWM) closed positive in 47% of them.
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Frequently Asked Questions
What are the current QQQ and IWM levels?+
QQQ closed near $656 in mid-April 2026 with YTD return approximately 1 percent. IWM (iShares Russell 2000) gained 11.7 percent month-to-date in April 2026, bringing YTD to approximately 11.8 percent. The 10.8pp IWM-vs-QQQ outperformance YTD is one of the largest small-vs-large divergences in recent years. Since August 2025, IWM +28% vs QQQ +12% (16pp over 8 months). QQQ/IWM ratio approximately 2.67 (12-month range 2.65-3.10, 5-year range 2.65-3.50 with peak in late 2024). The pair captures growth-vs-value, large-vs-small, and global-vs-domestic factor rotations simultaneously.
What's in QQQ vs IWM?+
QQQ holds ~100 stocks tracking Nasdaq 100. Top 10 = ~50 percent of assets: AAPL ~9%, MSFT ~7%, NVDA ~9%, AMZN ~6%, Google combined ~6%, META ~5%, TSLA ~4%, AVGO ~4%, COST ~3%. Magnificent 7 ~50% of QQQ. IWM holds 2,000 small-cap stocks with median market cap ~$1 billion. No single holding exceeds 0.5 percent. IWM sectors: Financials 17%, Industrials 15%, Healthcare 14%, Tech 13%, Consumer Disc 11%. QQQ international revenue ~50 percent; IWM ~30 percent. QQQ average market cap ~$750 billion; IWM median $1 billion (700x size differential).
What drove the April 2026 rotation?+
Three catalysts. First, Iran ceasefire negotiations progressing. Second, WTI oil retracing from $105 peak toward $95 then lower. Third, Fed rate-cut expectations resetting toward 2-3 cuts in 2026. The combination produced textbook small-cap-vs-tech rotation: small caps benefited from rate-cut anticipation and risk-on sentiment while QQQ faced AI capex translation questions and Iran-related defensive flight to mega-caps had already played out. The 10.8pp YTD divergence is unusual but not unprecedented (2009 small-cap rebound saw 25+pp; 2020 similar magnitudes).
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.