The iShares Russell 1000 Value ETF (IWD) and the ProShares UltraPro QQQ (TQQQ) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and TQQQ is a ProShares Trading–Leveraged Equity fund. So, what’s the difference between IWD and TQQQ? And which fund is better?
The expense ratio of IWD is 0.76 percentage points lower than TQQQ’s (0.19% vs. 0.95%). IWD also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IWD has provided lower returns than TQQQ over the past ten years.
In this article, we’ll compare IWD vs. TQQQ. We’ll look at annual returns and performance, as well as at their holdings and risk metrics. Moreover, I’ll also discuss IWD’s and TQQQ’s fund composition, portfolio growth, and industry exposure and examine how these affect their overall returns.
Summary
| IWD | TQQQ | |
| Name | iShares Russell 1000 Value ETF | ProShares UltraPro QQQ |
| Category | Large Value | Trading–Leveraged Equity |
| Issuer | iShares | ProShares |
| AUM | 54.1B | 12.41B |
| Avg. Return | 11.40% | 61.22% |
| Div. Yield | 1.57% | 0.0% |
| Expense Ratio | 0.19% | 0.95% |
The iShares Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.
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%.
IWD’s dividend yield is 1.57% higher than that of TQQQ (1.57% vs. 0.0%). Also, IWD yielded on average 49.82% less per year over the past decade (11.40% vs. 61.22%). The expense ratio of IWD is 0.76 percentage points lower than TQQQ’s (0.19% vs. 0.95%).
Fund Composition
Industry Exposure
| IWD | TQQQ | |
| Technology | 10.28% | 0.0% |
| Industrials | 11.77% | 0.0% |
| Energy | 4.76% | 0.0% |
| Communication Services | 8.67% | 0.0% |
| Utilities | 4.88% | 0.0% |
| Healthcare | 17.78% | 0.0% |
| Consumer Defensive | 7.76% | 0.0% |
| Real Estate | 4.94% | 0.0% |
| Financial Services | 20.43% | 0.0% |
| Consumer Cyclical | 5.62% | 0.0% |
| Basic Materials | 3.1% | 0.0% |
The iShares Russell 1000 Value ETF (IWD) has the most exposure to the Financial Services sector at 20.43%. This is followed by Healthcare and Industrials at 17.78% and 11.77% respectively. Energy (4.76%), Utilities (4.88%), and Real Estate (4.94%) only make up 14.58% of the fund’s total assets.
IWD’s mid-section with moderate exposure is comprised of Consumer Cyclical, Consumer Defensive, Communication Services, Technology, and Industrials stocks at 5.62%, 7.76%, 8.67%, 10.28%, and 11.77%.
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%.
IWD is 20.43% more exposed to the Financial Services sector than TQQQ (20.43% vs 0.0%). IWD’s exposure to Healthcare and Industrials stocks is 17.78% higher and 11.77% higher respectively (17.78% vs. 0.0% and 11.77% vs. 0.0%). In total, Energy, Utilities, and Real Estate also make up 14.58% more of the fund’s holdings compared to TQQQ (14.58% vs. 0.00%).
Holdings
| IWD Holdings | Weight |
| Berkshire Hathaway Inc Class B | 2.58% |
| JPMorgan Chase & Co | 2.25% |
| Johnson & Johnson | 2.24% |
| UnitedHealth Group Inc | 1.78% |
| Procter & Gamble Co | 1.71% |
| The Walt Disney Co | 1.5% |
| Bank of America Corp | 1.43% |
| Comcast Corp Class A | 1.33% |
| Exxon Mobil Corp | 1.2% |
| Pfizer Inc | 1.18% |
IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.
The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.
| 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%.
Risk Analysis
| IWD | TQQQ | |
| Mean Return | 1.03 | 4.65 |
| R-squared | 92.38 | 83.64 |
| Std. Deviation | 14.35 | 50.08 |
| Alpha | -3.23 | 7.29 |
| Beta | 1.02 | 3.37 |
| Sharpe Ratio | 0.81 | 1.1 |
| Treynor Ratio | 11.06 | 15.65 |
The iShares Russell 1000 Value ETF (IWD) has a Standard Deviation of 14.35 with a R-squared of 92.38 and a Treynor Ratio of 11.06. Its Alpha is -3.23 while IWD’s Beta is 1.02. Furthermore, the fund has a Sharpe Ratio of 0.81 and a Mean Return of 1.03.
The ProShares UltraPro QQQ (TQQQ) has a R-squared of 83.64 with a Sharpe Ratio of 1.1 and a Treynor Ratio of 15.65. Its Standard Deviation is 50.08 while TQQQ’s Beta is 3.37. Furthermore, the fund has a Mean Return of 4.65 and a Alpha of 7.29.
IWD’s Mean Return is 3.62 points lower than that of TQQQ and its R-squared is 8.74 points higher. With a Standard Deviation of 14.35, IWD is slightly less volatile than TQQQ. The Alpha and Beta of IWD are 10.52 points lower and 2.35 points lower than TQQQ’s Alpha and Beta.
Performance
Annual Returns
| Year | IWD | TQQQ |
| 2020 | 2.67% | 109.85% |
| 2019 | 26.34% | 133.93% |
| 2018 | -8.4% | -19.65% |
| 2017 | 13.47% | 118.65% |
| 2016 | 17.09% | 11.04% |
| 2015 | -3.95% | 17.41% |
| 2014 | 13.21% | 56.82% |
| 2013 | 32.18% | 139.98% |
| 2012 | 17.28% | 51.95% |
| 2011 | 0.21% | -7.77% |
| 2010 | 15.3% | 0.0% |
IWD had its best year in 2013 with an annual return of 32.18%. IWD’s worst year over the past decade yielded -8.4% and occurred in 2018. In most years the iShares Russell 1000 Value ETF provided moderate returns such as in 2014, 2017, and 2010 where annual returns amounted to 13.21%, 13.47%, and 15.3% 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
| Fund | Initial Balance | Final Balance | CAGR |
| IWD | $10,000 | $26,666 | 11.40% |
| TQQQ | $10,000 | $593,012 | 61.22% |
A $10,000 investment in IWD would have resulted in a final balance of $26,666. This is a profit of $16,666 over 10 years and amounts to a compound annual growth rate (CAGR) of 11.40%.
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%.
IWD’s CAGR is 49.82 percentage points lower than that of TQQQ and as a result, would have yielded $566,346 less on a $10,000 investment. Thus, IWD performed worse than TQQQ by 49.82% annually.
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