IWF vs. TQQQ: What’s The Difference?

The iShares Russell 1000 Growth ETF (IWF) and the ProShares UltraPro QQQ (TQQQ) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and TQQQ is a ProShares Trading–Leveraged Equity fund. So, what’s the difference between IWF and TQQQ? And which fund is better?

The expense ratio of IWF is 0.76 percentage points lower than TQQQ’s (0.19% vs. 0.95%). IWF also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWF has provided lower returns than TQQQ over the past ten years.

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

Summary

IWF TQQQ
Name iShares Russell 1000 Growth ETF ProShares UltraPro QQQ
Category Large Growth Trading–Leveraged Equity
Issuer iShares ProShares
AUM 72.16B 12.41B
Avg. Return 17.72% 61.22%
Div. Yield 0.52% 0.0%
Expense Ratio 0.19% 0.95%

The iShares Russell 1000 Growth ETF (IWF) is a Large Growth fund that is issued by iShares. It currently has 72.16B total assets under management and has yielded an average annual return of 17.72% over the past 10 years. The fund has a dividend yield of 0.52% 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%.

IWF’s dividend yield is 0.52% higher than that of TQQQ (0.52% vs. 0.0%). Also, IWF yielded on average 43.50% less per year over the past decade (17.72% vs. 61.22%). The expense ratio of IWF is 0.76 percentage points lower than TQQQ’s (0.19% vs. 0.95%).

Fund Composition

Industry Exposure

IWF vs. TQQQ - Industry Exposure

IWF TQQQ
Technology 39.29% 0.0%
Industrials 6.19% 0.0%
Energy 0.28% 0.0%
Communication Services 12.82% 0.0%
Utilities 0.03% 0.0%
Healthcare 9.23% 0.0%
Consumer Defensive 4.31% 0.0%
Real Estate 1.85% 0.0%
Financial Services 7.36% 0.0%
Consumer Cyclical 17.62% 0.0%
Basic Materials 1.01% 0.0%

The iShares Russell 1000 Growth ETF (IWF) has the most exposure to the Technology sector at 39.29%. This is followed by Consumer Cyclical and Communication Services at 17.62% and 12.82% respectively. Energy (0.28%), Basic Materials (1.01%), and Real Estate (1.85%) only make up 3.14% of the fund’s total assets.

IWF’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Communication Services stocks at 4.31%, 6.19%, 7.36%, 9.23%, and 12.82%.

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%.

IWF is 39.29% more exposed to the Technology sector than TQQQ (39.29% vs 0.0%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 17.62% higher and 12.82% higher respectively (17.62% vs. 0.0% and 12.82% vs. 0.0%). In total, Energy, Basic Materials, and Real Estate also make up 3.14% more of the fund’s holdings compared to TQQQ (3.14% vs. 0.00%).

Holdings

IWF - Holdings

IWF Holdings Weight
Apple Inc 10.51%
Microsoft Corp 9.85%
Amazon.com Inc 6.63%
Facebook Inc Class A 3.91%
Alphabet Inc Class A 3.2%
Alphabet Inc Class C 3.03%
Tesla Inc 2.45%
NVIDIA Corp 2.14%
Visa Inc Class A 1.91%
The Home Depot Inc 1.62%

IWF’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.51%, 9.85%, 6.63%, 3.91%, and 3.2%.

Alphabet Inc Class C (3.03%), Tesla Inc (2.45%), and NVIDIA Corp (2.14%) have a slightly smaller but still significant weight. Visa Inc Class A and The Home Depot Inc are also represented in the IWF’s holdings at 1.91% and 1.62%.

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%.

Risk Analysis

IWF TQQQ
Mean Return 1.48 4.65
R-squared 92.93 83.64
Std. Deviation 14.42 50.08
Alpha 2.16 7.29
Beta 1.03 3.37
Sharpe Ratio 1.19 1.1
Treynor Ratio 17.1 15.65

The iShares Russell 1000 Growth ETF (IWF) has a Treynor Ratio of 17.1 with a Sharpe Ratio of 1.19 and a Standard Deviation of 14.42. Its Beta is 1.03 while IWF’s R-squared is 92.93. Furthermore, the fund has a Alpha of 2.16 and a Mean Return of 1.48.

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 Alpha is 7.29. Furthermore, the fund has a Mean Return of 4.65 and a Beta of 3.37.

IWF’s Mean Return is 3.17 points lower than that of TQQQ and its R-squared is 9.29 points higher. With a Standard Deviation of 14.42, IWF is slightly less volatile than TQQQ. The Alpha and Beta of IWF are 5.13 points lower and 2.34 points lower than TQQQ’s Alpha and Beta.

Performance

Annual Returns

IWF vs. TQQQ - Annual Returns

Year IWF TQQQ
2020 38.21% 109.85%
2019 36.08% 133.93%
2018 -1.68% -19.65%
2017 29.96% 118.65%
2016 6.92% 11.04%
2015 5.48% 17.41%
2014 12.84% 56.82%
2013 33.19% 139.98%
2012 15.03% 51.95%
2011 2.47% -7.77%
2010 16.47% 0.0%

IWF had its best year in 2020 with an annual return of 38.21%. IWF’s worst year over the past decade yielded -1.68% and occurred in 2018. In most years the iShares Russell 1000 Growth ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 12.84%, 15.03%, and 16.47% 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

IWF vs. TQQQ - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWF $10,000 $48,012 17.72%
TQQQ $10,000 $593,012 61.22%

A $10,000 investment in IWF would have resulted in a final balance of $48,012. This is a profit of $38,012 over 10 years and amounts to a compound annual growth rate (CAGR) of 17.72%.

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%.

IWF’s CAGR is 43.50 percentage points lower than that of TQQQ and as a result, would have yielded $545,000 less on a $10,000 investment. Thus, IWF performed worse than TQQQ by 43.50% annually.


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