GLD vs. TQQQ: What’s The Difference?

The SPDR Gold Shares (GLD) and the ProShares UltraPro QQQ (TQQQ) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and TQQQ is a ProShares Trading–Leveraged Equity fund. So, what’s the difference between GLD and TQQQ? And which fund is better?

The expense ratio of GLD is 0.55 percentage points lower than TQQQ’s (0.4% vs. 0.95%). GLD also has a lower exposure to the technology sector and a lower standard deviation. Overall, GLD has provided lower returns than TQQQ over the past ten years.

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

Summary

GLD TQQQ
Name SPDR Gold Shares ProShares UltraPro QQQ
Category N/A Trading–Leveraged Equity
Issuer SPDR State Street Global Advisors ProShares
AUM 59.26B 12.41B
Avg. Return 5.81% 61.22%
Div. Yield 0.0% 0.0%
Expense Ratio 0.4% 0.95%

The SPDR Gold Shares (GLD) is a N/A fund that is issued by SPDR State Street Global Advisors. It currently has 59.26B total assets under management and has yielded an average annual return of 5.81% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.4%.

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%.

GLD’s dividend yield is 0.00% lower than that of TQQQ (0.0% vs. 0.0%). Also, GLD yielded on average 55.42% less per year over the past decade (5.81% vs. 61.22%). The expense ratio of GLD is 0.55 percentage points lower than TQQQ’s (0.4% vs. 0.95%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

GLD vs. TQQQ - Industry Exposure

GLD TQQQ
Technology 0.0% 0.0%
Industrials 0.0% 0.0%
Energy 0.0% 0.0%
Communication Services 0.0% 0.0%
Utilities 0.0% 0.0%
Healthcare 0.0% 0.0%
Consumer Defensive 0.0% 0.0%
Real Estate 0.0% 0.0%
Financial Services 0.0% 0.0%
Consumer Cyclical 0.0% 0.0%
Basic Materials 0.0% 0.0%

The SPDR Gold Shares (GLD) 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.

GLD’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%.

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%.

GLD is 0.00% less exposed to the Technology sector than TQQQ (0.0% vs 0.0%). GLD’s exposure to Industrials and Energy stocks is 0.00% lower and 0.00% lower respectively (0.0% vs. 0.0% and 0.0% vs. 0.0%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 0.00% less of the fund’s holdings compared to TQQQ (0.00% vs. 0.00%).

Holdings

GLD - Holdings

GLD Holdings Weight
Gold Trust 100.0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%

GLD’s Top Holdings are Gold Trust, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.

N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the GLD’s holdings at 0% and 0%.

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%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

GLD TQQQ
Mean Return 0.21 4.65
R-squared 16.21 83.64
Std. Deviation 16.58 50.08
Alpha 3.91 7.29
Beta 0.48 3.37
Sharpe Ratio 0.12 1.1
Treynor Ratio 1.21 15.65

The SPDR Gold Shares (GLD) has a Standard Deviation of 16.58 with a Sharpe Ratio of 0.12 and a Beta of 0.48. Its R-squared is 16.21 while GLD’s Treynor Ratio is 1.21. Furthermore, the fund has a Alpha of 3.91 and a Mean Return of 0.21.

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

GLD’s Mean Return is 4.44 points lower than that of TQQQ and its R-squared is 67.43 points lower. With a Standard Deviation of 16.58, GLD is slightly less volatile than TQQQ. The Alpha and Beta of GLD are 3.38 points lower and 2.89 points lower than TQQQ’s Alpha and Beta.

BTW: Uncorrelated crypto assets such as Bitcoin can serve as a hedge and mitigate risk. I've allocated around 5% of my portfolio to crypto assets through Gemini - the simplest and cheapest broker I've found! Click here to read more (link to Gemini).

Performance

Annual Returns

GLD vs. TQQQ - Annual Returns

Year GLD TQQQ
2020 23.68% 109.85%
2019 18.36% 133.93%
2018 -1.54% -19.65%
2017 11.41% 118.65%
2016 8.69% 11.04%
2015 -11.78% 17.41%
2014 -0.58% 56.82%
2013 -28.09% 139.98%
2012 5.26% 51.95%
2011 11.2% -7.77%
2010 27.25% 0.0%

GLD had its best year in 2010 with an annual return of 27.25%. GLD’s worst year over the past decade yielded -28.09% and occurred in 2013. In most years the SPDR Gold Shares provided moderate returns such as in 2012, 2016, and 2011 where annual returns amounted to 5.26%, 8.69%, and 11.2% 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

GLD vs. TQQQ - Portfolio Growth

Fund Initial Balance Final Balance CAGR
GLD $10,000 $12,884 5.81%
TQQQ $10,000 $593,012 61.22%

A $10,000 investment in GLD would have resulted in a final balance of $12,884. This is a profit of $2,884 over 10 years and amounts to a compound annual growth rate (CAGR) of 5.81%.

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%.

GLD’s CAGR is 55.42 percentage points lower than that of TQQQ and as a result, would have yielded $580,128 less on a $10,000 investment. Thus, GLD performed worse than TQQQ by 55.42% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply