TQQQ vs. QQQ: Which Is Better? (2024)

FAQs

TQQQ vs. QQQ: Which Is Better? ›

QQQ tracks the Nasdaq-100 Index passively, while TQQQ is highly levered. TQQQ seeks daily returns that are three times those of the QQQ (before fees and expenses.) QQQ experiences smaller price fluctuations and is considered to be less risky than TQQQ.

QQQ - Volatility Comparison. ProShares UltraPro QQQ (TQQQ) has a higher volatility of 10.02% compared to Invesco QQQ (QQQ) at 3.41%. This indicates that TQQQ's price experiences larger fluctuations and is considered to be riskier than QQQ based on this measure.

QQQ appears to be the single best long-term investment option for investors seeking total returns due to its ability to expose holders to top U.S. companies on an ongoing basis. The Nasdaq 100 has consistently outperformed the S&P 500 in terms of total returns, making it a favorable choice for long-term investors.

Leverage risk

TQQQ's triple leverage can significantly magnify losses. As a result, it is a highly volatile investment and is generally considered unsuitable for long-term investing.

TQQQ Signals & Forecast

Mostly positive signals in the chart today. The TQQQ ETF holds buy signals from both short and long-term Moving Averages giving a positive forecast for the stock.

Leveraged ETF prices tend to decay over time, and triple leverage will tend to decay at a faster rate than 2x leverage. As a result, they can tend toward zero.

TQQQ Dividend Information

TQQQ has a dividend yield of 1.07% and paid $0.70 per share in the past year. The dividend is paid every six months and the last ex-dividend date was Mar 20, 2024.

This ETF provides synthetic exposure, by owning its shares you earn the return of the index indirectly through the use of derivatives or a swap (i.e. a contract with a financial institution which delivers the return of the index). This share class generates a stream of income by distributing dividends.

Can you hold TQQQ forever? ›

7 While the Nasdaq-100 is historically more volatile than the S&P 500, QQQ can be held over long time frames while its cousin, TQQQ is definitely a short-term trade.

The QQQ ETF offers buy-and-hold investors low expenses and long-term growth potential with enough diversification to avoid the risks of betting on one company. On the downside, long-term investors in QQQ must deal with sector risk, possible overvaluation, and the absence of small caps.

The TQQQ fund is designed to provide triple leveraged performance of the Nasdaq-100 Index. By trading TQQQ, investors can amplify their potential gains when the Nasdaq-100 is performing well. However, it's critical to remember that leveraged funds also intensify losses during downturns.

ProShares UltraPro QQQ (TQQQ)

Due to the daily reset feature, holding the fund for longer than a single day will result in compounding of returns and results that are likely to significantly differ from the target return.

Investors should note that TQQQ's leverage resets on a daily basis, which results in compounding of returns when held for multiple periods.

Average Return

In the past year, QQQ returned a total of 30.38%, which is higher than VOO's 27.99% return. Over the past 10 years, QQQ has had annualized average returns of 18.30% , compared to 12.63% for VOO. These numbers are adjusted for stock splits and include dividends.

Cons of TQQQ

Expenses: Most ETFs have expense ratios below 0.20%, whereas the expenses for TQQQ are 0.95%, or $95 for every $10,000 invested.

ProShares UltraPro QQQ had a return of 24.87% year-to-date (YTD) and 111.05% in the last 12 months. Over the past 10 years, ProShares UltraPro QQQ had an annualized return of 38.12%, outperforming the S&P 500 benchmark which had an annualized return of 10.90%.