IWR vs. TQQQ: What’s The Difference?

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

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

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

Summary

IWR TQQQ
Name iShares Russell Mid-Cap ETF ProShares UltraPro QQQ
Category Mid-Cap Blend Trading–Leveraged Equity
Issuer iShares ProShares
AUM 29.84B 12.41B
Avg. Return 14.15% 61.22%
Div. Yield 0.99% 0.0%
Expense Ratio 0.19% 0.95%

The iShares Russell Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% 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%.

IWR’s dividend yield is 0.99% higher than that of TQQQ (0.99% vs. 0.0%). Also, IWR yielded on average 47.07% less per year over the past decade (14.15% vs. 61.22%). The expense ratio of IWR is 0.76 percentage points lower than TQQQ’s (0.19% vs. 0.95%).

Fund Composition

Industry Exposure

IWR vs. TQQQ - Industry Exposure

IWR TQQQ
Technology 19.67% 0.0%
Industrials 14.54% 0.0%
Energy 3.48% 0.0%
Communication Services 4.64% 0.0%
Utilities 4.46% 0.0%
Healthcare 11.76% 0.0%
Consumer Defensive 3.82% 0.0%
Real Estate 8.31% 0.0%
Financial Services 11.64% 0.0%
Consumer Cyclical 13.59% 0.0%
Basic Materials 4.1% 0.0%

The iShares Russell Mid-Cap ETF (IWR) has the most exposure to the Technology sector at 19.67%. This is followed by Industrials and Consumer Cyclical at 14.54% and 13.59% respectively. Consumer Defensive (3.82%), Basic Materials (4.1%), and Utilities (4.46%) only make up 12.38% of the fund’s total assets.

IWR’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Healthcare, and Consumer Cyclical stocks at 4.64%, 8.31%, 11.64%, 11.76%, 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%.

IWR is 19.67% more exposed to the Technology sector than TQQQ (19.67% vs 0.0%). IWR’s exposure to Industrials and Consumer Cyclical stocks is 14.54% higher and 13.59% higher respectively (14.54% vs. 0.0% and 13.59% vs. 0.0%). In total, Consumer Defensive, Basic Materials, and Utilities also make up 12.38% more of the fund’s holdings compared to TQQQ (12.38% vs. 0.00%).

Holdings

IWR - Holdings

IWR Holdings Weight
IDEXX Laboratories Inc 0.51%
DocuSign Inc 0.51%
Twitter Inc 0.48%
Chipotle Mexican Grill Inc 0.47%
Roku Inc Class A 0.44%
Marvell Technology Inc 0.44%
DexCom Inc 0.44%
Trane Technologies PLC 0.43%
MSCI Inc 0.43%
Carrier Global Corp Ordinary Shares 0.43%

IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.

Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.

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

IWR TQQQ
Mean Return 1.17 4.65
R-squared 91.52 83.64
Std. Deviation 15.66 50.08
Alpha -2.8 7.29
Beta 1.11 3.37
Sharpe Ratio 0.86 1.1
Treynor Ratio 11.72 15.65

The iShares Russell Mid-Cap ETF (IWR) has a R-squared of 91.52 with a Alpha of -2.8 and a Treynor Ratio of 11.72. Its Mean Return is 1.17 while IWR’s Sharpe Ratio is 0.86. Furthermore, the fund has a Standard Deviation of 15.66 and a Beta of 1.11.

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

IWR’s Mean Return is 3.48 points lower than that of TQQQ and its R-squared is 7.88 points higher. With a Standard Deviation of 15.66, IWR is slightly less volatile than TQQQ. The Alpha and Beta of IWR are 10.09 points lower and 2.26 points lower than TQQQ’s Alpha and Beta.

Performance

Annual Returns

IWR vs. TQQQ - Annual Returns

Year IWR TQQQ
2020 16.91% 109.85%
2019 30.31% 133.93%
2018 -9.13% -19.65%
2017 18.32% 118.65%
2016 13.58% 11.04%
2015 -2.57% 17.41%
2014 13.03% 56.82%
2013 34.5% 139.98%
2012 17.13% 51.95%
2011 -1.67% -7.77%
2010 25.25% 0.0%

IWR had its best year in 2013 with an annual return of 34.5%. IWR’s worst year over the past decade yielded -9.13% and occurred in 2018. In most years the iShares Russell Mid-Cap ETF provided moderate returns such as in 2016, 2020, and 2012 where annual returns amounted to 13.58%, 16.91%, and 17.13% 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

IWR vs. TQQQ - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWR $10,000 $31,737 14.15%
TQQQ $10,000 $593,012 61.22%

A $10,000 investment in IWR would have resulted in a final balance of $31,737. This is a profit of $21,737 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.15%.

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%.

IWR’s CAGR is 47.07 percentage points lower than that of TQQQ and as a result, would have yielded $561,275 less on a $10,000 investment. Thus, IWR performed worse than TQQQ by 47.07% annually.


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