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ITOT vs. TQQQ: What’s The Difference?

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

The expense ratio of ITOT is 0.92 percentage points lower than TQQQ’s (0.03% vs. 0.95%). ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided lower returns than TQQQ over the past ten years.

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

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Summary

ITOTTQQQ
NameiShares Core S&P Total U.S. Stock Market ETFProShares UltraPro QQQ
CategoryLarge BlendTrading–Leveraged Equity
IssueriSharesProShares
AUM41.97B12.41B
Avg. Return14.59%61.22%
Div. Yield1.2%0.0%
Expense Ratio0.03%0.95%

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) is a Large Blend fund that is issued by iShares. It currently has 41.97B total assets under management and has yielded an average annual return of 14.59% over the past 10 years. The fund has a dividend yield of 1.2% with an expense ratio of 0.03%.

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%.

ITOT’s dividend yield is 1.20% higher than that of TQQQ (1.2% vs. 0.0%). Also, ITOT yielded on average 46.63% less per year over the past decade (14.59% vs. 61.22%). The expense ratio of ITOT is 0.92 percentage points lower than TQQQ’s (0.03% vs. 0.95%).

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Fund Composition

Industry Exposure

ITOT vs. TQQQ - Industry Exposure

ITOTTQQQ
Technology24.49%0.0%
Industrials9.21%0.0%
Energy2.51%0.0%
Communication Services10.54%0.0%
Utilities2.35%0.0%
Healthcare13.59%0.0%
Consumer Defensive5.79%0.0%
Real Estate3.67%0.0%
Financial Services13.69%0.0%
Consumer Cyclical11.69%0.0%
Basic Materials2.47%0.0%

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has the most exposure to the Technology sector at 24.49%. This is followed by Financial Services and Healthcare at 13.69% and 13.59% respectively. Basic Materials (2.47%), Energy (2.51%), and Real Estate (3.67%) only make up 8.65% of the fund’s total assets.

ITOT’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.79%, 9.21%, 10.54%, 11.69%, and 13.59%.

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%.

ITOT is 24.49% more exposed to the Technology sector than TQQQ (24.49% vs 0.0%). ITOT’s exposure to Financial Services and Healthcare stocks is 13.69% higher and 13.59% higher respectively (13.69% vs. 0.0% and 13.59% vs. 0.0%). In total, Basic Materials, Energy, and Real Estate also make up 8.65% more of the fund’s holdings compared to TQQQ (8.65% vs. 0.00%).

Holdings

ITOT - Holdings

ITOT HoldingsWeight
Apple Inc5.07%
Microsoft Corp4.75%
Amazon.com Inc3.16%
Facebook Inc Class A1.89%
Alphabet Inc Class A1.79%
Alphabet Inc Class C1.71%
Tesla Inc1.17%
Berkshire Hathaway Inc Class B1.17%
NVIDIA Corp1.08%
JPMorgan Chase & Co1.02%

ITOT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.07%, 4.75%, 3.16%, 1.89%, and 1.79%.

Alphabet Inc Class C (1.71%), Tesla Inc (1.17%), and Berkshire Hathaway Inc Class B (1.17%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ITOT’s holdings at 1.08% and 1.02%.

TQQQ - Holdings

TQQQ HoldingsWeight
Nasdaq 100 Index Swap Goldman Sachs International45.11%
Nasdaq 100 Index Swap Societe Generale44.73%
Nasdaq 100 Index Swap Bnp Paribas38.05%
Nasdaq 100 Index Swap Bank Of America Na31.53%
Nasdaq 100 Index Swap Citibank Na31.49%
Nasdaq 100 Index Swap Jp Morgan Securities26.2%
Apple Inc7.49%
Microsoft Corp6.69%
Nasdaq 100 Index Swap Credit Suisse International5.9%
Amazon.com Inc5.68%

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

ITOTTQQQ
Mean Return1.274.65
R-squared99.483.64
Std. Deviation14.0250.08
Alpha-0.547.29
Beta1.033.37
Sharpe Ratio1.041.1
Treynor Ratio14.1315.65

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Alpha of -0.54 with a Sharpe Ratio of 1.04 and a R-squared of 99.4. Its Beta is 1.03 while ITOT’s Standard Deviation is 14.02. Furthermore, the fund has a Treynor Ratio of 14.13 and a Mean Return of 1.27.

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

ITOT’s Mean Return is 3.38 points lower than that of TQQQ and its R-squared is 15.76 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than TQQQ. The Alpha and Beta of ITOT are 7.83 points lower and 2.34 points lower than TQQQ’s Alpha and Beta.

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Performance

Annual Returns

ITOT vs. TQQQ - Annual Returns

YearITOTTQQQ
202020.75%109.85%
201930.87%133.93%
2018-5.27%-19.65%
201721.23%118.65%
201612.59%11.04%
20150.96%17.41%
201413.01%56.82%
201332.67%139.98%
201215.98%51.95%
20111.55%-7.77%
201016.15%0.0%

ITOT had its best year in 2013 with an annual return of 32.67%. ITOT’s worst year over the past decade yielded -5.27% and occurred in 2018. In most years the iShares Core S&P Total U.S. Stock Market ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.01%, 15.98%, and 16.15% 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

ITOT vs. TQQQ - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
ITOT$10,000$36,42714.59%
TQQQ$10,000$593,01261.22%

A $10,000 investment in ITOT would have resulted in a final balance of $36,427. This is a profit of $26,427 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.59%.

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%.

ITOT’s CAGR is 46.63 percentage points lower than that of TQQQ and as a result, would have yielded $556,585 less on a $10,000 investment. Thus, ITOT performed worse than TQQQ by 46.63% annually.


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