IJR vs. TQQQ: What’s The Difference?

The iShares Core S&P Small-Cap ETF (IJR) and the ProShares UltraPro QQQ (TQQQ) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and TQQQ is a ProShares Trading–Leveraged Equity fund. So, what’s the difference between IJR and TQQQ? And which fund is better?

The expense ratio of IJR is 0.89 percentage points lower than TQQQ’s (0.06% vs. 0.95%). IJR also has a higher exposure to the industrials sector and a lower standard deviation. Overall, IJR has provided lower returns than TQQQ over the past ten years.

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

Summary

IJR TQQQ
Name iShares Core S&P Small-Cap ETF ProShares UltraPro QQQ
Category Small Blend Trading–Leveraged Equity
Issuer iShares ProShares
AUM 68.64B 12.41B
Avg. Return 13.97% 61.22%
Div. Yield 0.96% 0.0%
Expense Ratio 0.06% 0.95%

The iShares Core S&P Small-Cap ETF (IJR) is a Small Blend fund that is issued by iShares. It currently has 68.64B total assets under management and has yielded an average annual return of 13.97% over the past 10 years. The fund has a dividend yield of 0.96% with an expense ratio of 0.06%.

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%.

IJR’s dividend yield is 0.96% higher than that of TQQQ (0.96% vs. 0.0%). Also, IJR yielded on average 47.25% less per year over the past decade (13.97% vs. 61.22%). The expense ratio of IJR is 0.89 percentage points lower than TQQQ’s (0.06% vs. 0.95%).

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Fund Composition

Industry Exposure

IJR vs. TQQQ - Industry Exposure

IJR TQQQ
Technology 14.32% 0.0%
Industrials 17.31% 0.0%
Energy 4.0% 0.0%
Communication Services 2.59% 0.0%
Utilities 1.8% 0.0%
Healthcare 11.55% 0.0%
Consumer Defensive 4.01% 0.0%
Real Estate 9.55% 0.0%
Financial Services 15.91% 0.0%
Consumer Cyclical 13.61% 0.0%
Basic Materials 5.34% 0.0%

The iShares Core S&P Small-Cap ETF (IJR) has the most exposure to the Industrials sector at 17.31%. This is followed by Financial Services and Technology at 15.91% and 14.32% respectively. Communication Services (2.59%), Energy (4.0%), and Consumer Defensive (4.01%) only make up 10.60% of the fund’s total assets.

IJR’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Healthcare, Consumer Cyclical, and Technology stocks at 5.34%, 9.55%, 11.55%, 13.61%, and 14.32%.

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%.

IJR is 17.31% more exposed to the Industrials sector than TQQQ (17.31% vs 0.0%). IJR’s exposure to Financial Services and Technology stocks is 15.91% higher and 14.32% higher respectively (15.91% vs. 0.0% and 14.32% vs. 0.0%). In total, Communication Services, Energy, and Consumer Defensive also make up 10.60% more of the fund’s holdings compared to TQQQ (10.60% vs. 0.00%).

Holdings

IJR - Holdings

IJR Holdings Weight
BlackRock Cash Funds Treasury SL Agency 1.08%
GameStop Corp Class A 0.86%
Omnicell Inc 0.61%
Stamps.com Inc 0.58%
Saia Inc 0.57%
Power Integrations Inc 0.57%
Exponent Inc 0.54%
NeoGenomics Inc 0.53%
Chart Industries Inc 0.53%
Macy’s Inc 0.51%

IJR’s Top Holdings are BlackRock Cash Funds Treasury SL Agency, GameStop Corp Class A, Omnicell Inc, Stamps.com Inc, and Saia Inc at 1.08%, 0.86%, 0.61%, 0.58%, and 0.57%.

Power Integrations Inc (0.57%), Exponent Inc (0.54%), and NeoGenomics Inc (0.53%) have a slightly smaller but still significant weight. Chart Industries Inc and Macy’s Inc are also represented in the IJR’s holdings at 0.53% and 0.51%.

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

IJR TQQQ
Mean Return 1.21 4.65
R-squared 76.03 83.64
Std. Deviation 18.68 50.08
Alpha -3.7 7.29
Beta 1.2 3.37
Sharpe Ratio 0.74 1.1
Treynor Ratio 10.77 15.65

The iShares Core S&P Small-Cap ETF (IJR) has a R-squared of 76.03 with a Treynor Ratio of 10.77 and a Mean Return of 1.21. Its Sharpe Ratio is 0.74 while IJR’s Alpha is -3.7. Furthermore, the fund has a Standard Deviation of 18.68 and a Beta of 1.2.

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

IJR’s Mean Return is 3.44 points lower than that of TQQQ and its R-squared is 7.61 points lower. With a Standard Deviation of 18.68, IJR is slightly less volatile than TQQQ. The Alpha and Beta of IJR are 10.99 points lower and 2.17 points lower than TQQQ’s Alpha and Beta.

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Performance

Annual Returns

IJR vs. TQQQ - Annual Returns

Year IJR TQQQ
2020 11.24% 109.85%
2019 22.79% 133.93%
2018 -8.43% -19.65%
2017 13.2% 118.65%
2016 26.49% 11.04%
2015 -2.0% 17.41%
2014 5.67% 56.82%
2013 41.36% 139.98%
2012 16.28% 51.95%
2011 0.9% -7.77%
2010 26.14% 0.0%

IJR had its best year in 2013 with an annual return of 41.36%. IJR’s worst year over the past decade yielded -8.43% and occurred in 2018. In most years the iShares Core S&P Small-Cap ETF provided moderate returns such as in 2020, 2017, and 2012 where annual returns amounted to 11.24%, 13.2%, and 16.28% 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

IJR vs. TQQQ - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJR $10,000 $30,759 13.97%
TQQQ $10,000 $593,012 61.22%

A $10,000 investment in IJR would have resulted in a final balance of $30,759. This is a profit of $20,759 over 10 years and amounts to a compound annual growth rate (CAGR) of 13.97%.

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%.

IJR’s CAGR is 47.25 percentage points lower than that of TQQQ and as a result, would have yielded $562,253 less on a $10,000 investment. Thus, IJR performed worse than TQQQ by 47.25% annually.


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