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IVW vs. TQQQ: What’s The Difference?

The iShares S&P 500 Growth ETF (IVW) and the ProShares UltraPro QQQ (TQQQ) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and TQQQ is a ProShares Trading–Leveraged Equity fund. So, what’s the difference between IVW and TQQQ? And which fund is better?

The expense ratio of IVW is 0.77 percentage points lower than TQQQ’s (0.18% vs. 0.95%). IVW also has a higher exposure to the technology sector and a lower standard deviation. Overall, IVW has provided lower returns than TQQQ over the past ten years.

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

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Summary

IVWTQQQ
NameiShares S&P 500 Growth ETFProShares UltraPro QQQ
CategoryLarge GrowthTrading–Leveraged Equity
IssueriSharesProShares
AUM35.72B12.41B
Avg. Return16.74%61.22%
Div. Yield0.61%0.0%
Expense Ratio0.18%0.95%

The iShares S&P 500 Growth ETF (IVW) is a Large Growth fund that is issued by iShares. It currently has 35.72B total assets under management and has yielded an average annual return of 16.74% over the past 10 years. The fund has a dividend yield of 0.61% with an expense ratio of 0.18%.

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%.

IVW’s dividend yield is 0.61% higher than that of TQQQ (0.61% vs. 0.0%). Also, IVW yielded on average 44.49% less per year over the past decade (16.74% vs. 61.22%). The expense ratio of IVW is 0.77 percentage points lower than TQQQ’s (0.18% vs. 0.95%).

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Fund Composition

Industry Exposure

IVW vs. TQQQ - Industry Exposure

IVWTQQQ
Technology37.8%0.0%
Industrials5.72%0.0%
Energy0.06%0.0%
Communication Services15.44%0.0%
Utilities0.47%0.0%
Healthcare11.88%0.0%
Consumer Defensive3.84%0.0%
Real Estate1.11%0.0%
Financial Services6.78%0.0%
Consumer Cyclical15.25%0.0%
Basic Materials1.65%0.0%

The iShares S&P 500 Growth ETF (IVW) has the most exposure to the Technology sector at 37.8%. This is followed by Communication Services and Consumer Cyclical at 15.44% and 15.25% respectively. Utilities (0.47%), Real Estate (1.11%), and Basic Materials (1.65%) only make up 3.23% of the fund’s total assets.

IVW’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 3.84%, 5.72%, 6.78%, 11.88%, and 15.25%.

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%.

IVW is 37.80% more exposed to the Technology sector than TQQQ (37.8% vs 0.0%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 15.44% higher and 15.25% higher respectively (15.44% vs. 0.0% and 15.25% vs. 0.0%). In total, Utilities, Real Estate, and Basic Materials also make up 3.23% more of the fund’s holdings compared to TQQQ (3.23% vs. 0.00%).

Holdings

IVW - Holdings

IVW HoldingsWeight
Apple Inc11.46%
Microsoft Corp10.75%
Amazon.com Inc7.14%
Facebook Inc Class A4.28%
Alphabet Inc Class A4.06%
Alphabet Inc Class C3.86%
Tesla Inc2.65%
NVIDIA Corp2.43%
PayPal Holdings Inc1.62%
Adobe Inc1.49%

IVW’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 11.46%, 10.75%, 7.14%, 4.28%, and 4.06%.

Alphabet Inc Class C (3.86%), Tesla Inc (2.65%), and NVIDIA Corp (2.43%) have a slightly smaller but still significant weight. PayPal Holdings Inc and Adobe Inc are also represented in the IVW’s holdings at 1.62% and 1.49%.

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

IVWTQQQ
Mean Return1.444.65
R-squared93.8283.64
Std. Deviation13.7750.08
Alpha2.197.29
Beta0.983.37
Sharpe Ratio1.211.1
Treynor Ratio17.2415.65

The iShares S&P 500 Growth ETF (IVW) has a Treynor Ratio of 17.24 with a Sharpe Ratio of 1.21 and a Standard Deviation of 13.77. Its Beta is 0.98 while IVW’s Alpha is 2.19. Furthermore, the fund has a Mean Return of 1.44 and a R-squared of 93.82.

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

IVW’s Mean Return is 3.21 points lower than that of TQQQ and its R-squared is 10.18 points higher. With a Standard Deviation of 13.77, IVW is slightly less volatile than TQQQ. The Alpha and Beta of IVW are 5.10 points lower and 2.39 points lower than TQQQ’s Alpha and Beta.

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Performance

Annual Returns

IVW vs. TQQQ - Annual Returns

YearIVWTQQQ
202033.21%109.85%
201930.91%133.93%
2018-0.17%-19.65%
201727.2%118.65%
20166.74%11.04%
20155.33%17.41%
201414.67%56.82%
201332.48%139.98%
201214.39%51.95%
20114.49%-7.77%
201014.84%0.0%

IVW had its best year in 2020 with an annual return of 33.21%. IVW’s worst year over the past decade yielded -0.17% and occurred in 2018. In most years the iShares S&P 500 Growth ETF provided moderate returns such as in 2012, 2014, and 2010 where annual returns amounted to 14.39%, 14.67%, and 14.84% 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

IVW vs. TQQQ - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IVW$10,000$45,20616.74%
TQQQ$10,000$593,01261.22%

A $10,000 investment in IVW would have resulted in a final balance of $45,206. This is a profit of $35,206 over 10 years and amounts to a compound annual growth rate (CAGR) of 16.74%.

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%.

IVW’s CAGR is 44.49 percentage points lower than that of TQQQ and as a result, would have yielded $547,806 less on a $10,000 investment. Thus, IVW performed worse than TQQQ by 44.49% annually.


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