The iShares Gold Trust (IAU) and the ProShares UltraPro QQQ (TQQQ) are both among the Top 100 ETFs. IAU is a iShares N/A fund and TQQQ is a ProShares Trading–Leveraged Equity fund. So, what’s the difference between IAU and TQQQ? And which fund is better?
The expense ratio of IAU is 0.70 percentage points lower than TQQQ’s (0.25% vs. 0.95%). IAU also has a lower exposure to the technology sector and a lower standard deviation. Overall, IAU has provided lower returns than TQQQ over the past 10 years.
In this article, we’ll compare IAU vs. TQQQ. We’ll look at industry exposure and holdings, as well as at their performance and annual returns. Moreover, I’ll also discuss IAU’s and TQQQ’s risk metrics, fund composition, and portfolio growth and examine how these affect their overall returns.
|Name||iShares Gold Trust||ProShares UltraPro QQQ|
The iShares Gold Trust (IAU) is a N/A fund that is issued by iShares. It currently has 28.61B total assets under management and has yielded an average annual return of 6.03% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.25%.
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%.
IAU’s dividend yield is 0.00% lower than that of TQQQ (0.0% vs. 0.0%). Also, IAU yielded on average 55.19% less per year over the past decade (6.03% vs. 61.22%). The expense ratio of IAU is 0.70 percentage points lower than TQQQ’s (0.25% vs. 0.95%).
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The iShares Gold Trust (IAU) 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.
IAU’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%.
IAU is 0.00% less exposed to the Technology sector than TQQQ (0.0% vs 0.0%). IAU’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%).
IAU’s Top Holdings are Gold, 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 IAU’s holdings at 0% and 0%.
|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%|
|Nasdaq 100 Index Swap Credit Suisse International||5.9%|
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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The iShares Gold Trust (IAU) has a Mean Return of 0.23 with a R-squared of 16.03 and a Alpha of 4.16. Its Treynor Ratio is 1.5 while IAU’s Standard Deviation is 16.97. Furthermore, the fund has a Sharpe Ratio of 0.13 and a Beta of 0.48.
The ProShares UltraPro QQQ (TQQQ) has a Alpha of 7.29 with a R-squared of 83.64 and a Mean Return of 4.65. Its Sharpe Ratio is 1.1 while TQQQ’s Beta is 3.37. Furthermore, the fund has a Treynor Ratio of 15.65 and a Standard Deviation of 50.08.
IAU’s Mean Return is 4.42 points lower than that of TQQQ and its R-squared is 67.61 points lower. With a Standard Deviation of 16.97, IAU is slightly less volatile than TQQQ. The Alpha and Beta of IAU are 3.13 points lower and 2.89 points lower than TQQQ’s Alpha and Beta.
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IAU had its best year in 2010 with an annual return of 27.93%. IAU’s worst year over the past decade yielded -27.96% and occurred in 2013. In most years the iShares Gold Trust provided moderate returns such as in 2012, 2011, and 2016 where annual returns amounted to 8.37%, 8.66%, and 8.85% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IAU would have resulted in a final balance of $13,121. This is a profit of $3,121 over 10 years and amounts to a compound annual growth rate (CAGR) of 6.03%.
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%.
IAU’s CAGR is 55.19 percentage points lower than that of TQQQ and as a result, would have yielded $579,891 less on a $10,000 investment. Thus, IAU performed worse than TQQQ by 55.19% annually.
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