DIA vs. TQQQ: What’s The Difference?

The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the ProShares UltraPro QQQ (TQQQ) are both among the Top 100 ETFs. DIA is a SPDR State Street Global Advisors Large Value fund and TQQQ is a ProShares Trading–Leveraged Equity fund. So, what’s the difference between DIA and TQQQ? And which fund is better?

The expense ratio of DIA is 0.79 percentage points lower than TQQQ’s (0.16% vs. 0.95%). DIA also has a higher exposure to the financial services sector and a lower standard deviation. Overall, DIA has provided lower returns than TQQQ over the past ten years.

In this article, we’ll compare DIA vs. TQQQ. We’ll look at annual returns and portfolio growth, as well as at their holdings and fund composition. Moreover, I’ll also discuss DIA’s and TQQQ’s risk metrics, industry exposure, and performance and examine how these affect their overall returns.

Summary

DIA TQQQ
Name SPDR Dow Jones Industrial Average ETF Trust ProShares UltraPro QQQ
Category Large Value Trading–Leveraged Equity
Issuer SPDR State Street Global Advisors ProShares
AUM 30.46B 12.41B
Avg. Return 13.35% 61.22%
Div. Yield 1.61% 0.0%
Expense Ratio 0.16% 0.95%

The SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.

The ProShares UltraPro QQQ (TQQQ) is a Trading–Leveraged Equity fund that is issued by ProShares. It currently has 12.41B total assets under management and has yielded an average annual return of 61.22% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.95%.

DIA’s dividend yield is 1.61% higher than that of TQQQ (1.61% vs. 0.0%). Also, DIA yielded on average 47.87% less per year over the past decade (13.35% vs. 61.22%). The expense ratio of DIA is 0.79 percentage points lower than TQQQ’s (0.16% vs. 0.95%).

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Fund Composition

Industry Exposure

DIA vs. TQQQ - Industry Exposure

DIA TQQQ
Technology 17.32% 0.0%
Industrials 16.7% 0.0%
Energy 2.0% 0.0%
Communication Services 4.42% 0.0%
Utilities 0.0% 0.0%
Healthcare 17.92% 0.0%
Consumer Defensive 6.3% 0.0%
Real Estate 0.0% 0.0%
Financial Services 20.68% 0.0%
Consumer Cyclical 13.44% 0.0%
Basic Materials 1.21% 0.0%

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has the most exposure to the Financial Services sector at 20.68%. This is followed by Healthcare and Technology at 17.92% and 17.32% respectively. Utilities (0.0%), Basic Materials (1.21%), and Energy (2.0%) only make up 3.21% of the fund’s total assets.

DIA’s mid-section with moderate exposure is comprised of Communication Services, Consumer Defensive, Consumer Cyclical, Industrials, and Technology stocks at 4.42%, 6.3%, 13.44%, 16.7%, and 17.32%.

The ProShares UltraPro QQQ (TQQQ) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.

TQQQ’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

DIA is 20.68% more exposed to the Financial Services sector than TQQQ (20.68% vs 0.0%). DIA’s exposure to Healthcare and Technology stocks is 17.92% higher and 17.32% higher respectively (17.92% vs. 0.0% and 17.32% vs. 0.0%). In total, Utilities, Basic Materials, and Energy also make up 3.21% more of the fund’s holdings compared to TQQQ (3.21% vs. 0.00%).

Holdings

DIA - Holdings

DIA Holdings Weight
UnitedHealth Group Inc 7.63%
Goldman Sachs Group Inc 7.23%
The Home Depot Inc 6.07%
Microsoft Corp 5.16%
Salesforce.com Inc 4.65%
Amgen Inc 4.64%
Boeing Co 4.56%
Visa Inc Class A 4.45%
McDonald’s Corp 4.4%
Honeywell International Inc 4.18%

DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.

Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.

TQQQ - Holdings

TQQQ Holdings Weight
Nasdaq 100 Index Swap Goldman Sachs International 45.11%
Nasdaq 100 Index Swap Societe Generale 44.73%
Nasdaq 100 Index Swap Bnp Paribas 38.05%
Nasdaq 100 Index Swap Bank Of America Na 31.53%
Nasdaq 100 Index Swap Citibank Na 31.49%
Nasdaq 100 Index Swap Jp Morgan Securities 26.2%
Apple Inc 7.49%
Microsoft Corp 6.69%
Nasdaq 100 Index Swap Credit Suisse International 5.9%
Amazon.com Inc 5.68%

TQQQ’s Top Holdings are Nasdaq 100 Index Swap Goldman Sachs International, Nasdaq 100 Index Swap Societe Generale, Nasdaq 100 Index Swap Bnp Paribas, Nasdaq 100 Index Swap Bank Of America Na, and Nasdaq 100 Index Swap Citibank Na at 45.11%, 44.73%, 38.05%, 31.53%, and 31.49%.

Nasdaq 100 Index Swap Jp Morgan Securities (26.2%), Apple Inc (7.49%), and Microsoft Corp (6.69%) have a slightly smaller but still significant weight. Nasdaq 100 Index Swap Credit Suisse International and Amazon.com Inc are also represented in the TQQQ’s holdings at 5.9% and 5.68%.

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Risk Analysis

DIA TQQQ
Mean Return 1.13 4.65
R-squared 93.31 83.64
Std. Deviation 13.68 50.08
Alpha -0.94 7.29
Beta 0.97 3.37
Sharpe Ratio 0.94 1.1
Treynor Ratio 13.07 15.65

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a Standard Deviation of 13.68 with a Sharpe Ratio of 0.94 and a Treynor Ratio of 13.07. Its Mean Return is 1.13 while DIA’s Alpha is -0.94. Furthermore, the fund has a R-squared of 93.31 and a Beta of 0.97.

The ProShares UltraPro QQQ (TQQQ) has a Sharpe Ratio of 1.1 with a Treynor Ratio of 15.65 and a Standard Deviation of 50.08. Its Mean Return is 4.65 while TQQQ’s R-squared is 83.64. Furthermore, the fund has a Beta of 3.37 and a Alpha of 7.29.

DIA’s Mean Return is 3.52 points lower than that of TQQQ and its R-squared is 9.67 points higher. With a Standard Deviation of 13.68, DIA is slightly less volatile than TQQQ. The Alpha and Beta of DIA are 8.23 points lower and 2.40 points lower than TQQQ’s Alpha and Beta.

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Performance

Annual Returns

DIA vs. TQQQ - Annual Returns

Year DIA TQQQ
2020 9.63% 109.85%
2019 25.09% 133.93%
2018 -3.6% -19.65%
2017 27.97% 118.65%
2016 16.28% 11.04%
2015 0.1% 17.41%
2014 9.88% 56.82%
2013 29.41% 139.98%
2012 10.04% 51.95%
2011 8.21% -7.77%
2010 13.87% 0.0%

DIA had its best year in 2013 with an annual return of 29.41%. DIA’s worst year over the past decade yielded -3.6% and occurred in 2018. In most years the SPDR Dow Jones Industrial Average ETF Trust provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 9.88%, 10.04%, and 13.87% respectively.

The year 2013 was the strongest year for TQQQ, returning 139.98% on an annual basis. The poorest year for TQQQ in the last ten years was 2018, with a yield of -19.65%. Most years the ProShares UltraPro QQQ has given investors modest returns, such as in 2015, 2012, and 2014, when gains were 17.41%, 51.95%, and 56.82% respectively.

Portfolio Growth

DIA vs. TQQQ - Portfolio Growth

Fund Initial Balance Final Balance CAGR
DIA $10,000 $33,341 13.35%
TQQQ $10,000 $593,012 61.22%

A $10,000 investment in DIA would have resulted in a final balance of $33,341. This is a profit of $23,341 over 10 years and amounts to a compound annual growth rate (CAGR) of 13.35%.

With a $10,000 investment in TQQQ, the end total would have been $593,012. This equates to a $583,012 profit over 10 years and a compound annual growth rate (CAGR) of 61.22%.

DIA’s CAGR is 47.87 percentage points lower than that of TQQQ and as a result, would have yielded $559,671 less on a $10,000 investment. Thus, DIA performed worse than TQQQ by 47.87% annually.


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