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

FAQs

TQQQ vs. QQQ: Which Is Better? ›

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.

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.

While the Fund has a daily investment objective, you may hold Fund shares for longer than one day if you believe it is consistent with your goals and risk tolerance. For any holding period other than a day, your return may be higher or lower than the Daily Target. These differences may be significant.

The symbol for TQQQ is TQQQ and it is traded on the NASDAQ (NASDAQ Stock Exchange). Several short-term signals, along with a general good trend, are positive and we conclude that the current level may hold a buying opportunity as there is a fair chance for TQQQ ETF to perform well in the short-term.

The primary reason to invest in the ProShares UltraPro QQQ ETF is to amplify your investment returns compared with simply investing in the Nasdaq-100. But the other side of the coin is that when the Nasdaq-100 falls, the ProShares UltraPro QQQ will fall 3 times as much.

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.

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.

The basic strategy is pretty simple: by holding TQQQ and some QQQ puts, you can insulate yourself from the downside and even realize a positive return if QQQ really sells off hard. Meanwhile, you have the aggressive upside offered by holding TQQQ.

Invesco ESG Nasdaq 100 ETF (QQMG)

As a result, QQMG only holds 94 of the 100 Nasdaq-100 components and has outperformed QQQ by about 4 percentage points since its inception. The QQMG fund has a 0.2% expense ratio.

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%.

Does TQQQ reset daily? ›

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

According to the latest long-term forecast, ProShares UltraPro QQQ price will hit $80 by the end of 2024 and then $125 by the end of 2025. ProShares UltraPro QQQ will rise to $150 within the year of 2027, $200 in 2029 and $250 in 2033.

TQQQ Dividend Information

TQQQ has a dividend yield of 1.04% 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.

Does Tqqq decay? Because of its volatility, the TQQQ leveraged ETF might not be a good long-term investment for traders, or so experts say. Analysts say this ETF and other similar to it (such as the SQQQ) are better suited for intraday holding.

The Invesco QQQ Trust is unique in that it tracks the performance of the Nasdaq-100 index. This includes the top 100 non-financial companies that trade on the Nasdaq exchange. It's worth discussing the ETF's composition. It's heavily weighted in two sectors.

For example, TQQQ requires a 100% margin and this totally impacts your day buying power. It has this in the document but doesn't mention 1x ETF, short of ETF, or may be some ETF need 100%.

So the short answer is yes. The longer answer is volatility decay impacts the journey of the ETF over time which is eventually reflected in the price you see today. Volatility decay's opposite is very efficient compounding during strong trends.

TQQQ has a dividend yield of 1.05% 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.

Investors should note that TQQQ's leverage resets on a daily basis, which results in compounding of returns when held for multiple periods. TQQQ can be a powerful tool for sophisticated investors, but should be avoided by those with a low risk tolerance or a buy-and-hold strategy.