The Invesco QQQ Trust (QQQ) and the ProShares UltraPro QQQ (TQQQ) are both among the Top 100 ETFs. QQQ is a Invesco Large Growth fund and TQQQ is a ProShares Trading–Leveraged Equity fund. So, what’s the difference between QQQ and TQQQ? And which fund is better?
The expense ratio of QQQ is 0.75 percentage points lower than TQQQ’s (0.2% vs. 0.95%). QQQ also has a higher exposure to the technology sector and a lower standard deviation. Overall, QQQ has provided lower returns than TQQQ over the past ten years.
In this article, we’ll compare QQQ vs. TQQQ. We’ll look at portfolio growth and fund composition, as well as at their industry exposure and annual returns. Moreover, I’ll also discuss QQQ’s and TQQQ’s performance, risk metrics, and holdings and examine how these affect their overall returns.
Summary
| QQQ | TQQQ | |
| Name | Invesco QQQ Trust | ProShares UltraPro QQQ |
| Category | Large Growth | Trading–Leveraged Equity |
| Issuer | Invesco | ProShares |
| AUM | 174.51B | 12.41B |
| Avg. Return | 21.27% | 61.22% |
| Div. Yield | 0.49% | 0.0% |
| Expense Ratio | 0.2% | 0.95% |
The Invesco QQQ Trust (QQQ) is a Large Growth fund that is issued by Invesco. It currently has 174.51B total assets under management and has yielded an average annual return of 21.27% over the past 10 years. The fund has a dividend yield of 0.49% with an expense ratio of 0.2%.
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%.
QQQ’s dividend yield is 0.49% higher than that of TQQQ (0.49% vs. 0.0%). Also, QQQ yielded on average 39.95% less per year over the past decade (21.27% vs. 61.22%). The expense ratio of QQQ is 0.75 percentage points lower than TQQQ’s (0.2% vs. 0.95%).
Fund Composition
Industry Exposure
| QQQ | TQQQ | |
| Technology | 45.46% | 0.0% |
| Industrials | 2.61% | 0.0% |
| Energy | 0.0% | 0.0% |
| Communication Services | 19.55% | 0.0% |
| Utilities | 0.89% | 0.0% |
| Healthcare | 7.04% | 0.0% |
| Consumer Defensive | 4.68% | 0.0% |
| Real Estate | 0.0% | 0.0% |
| Financial Services | 2.51% | 0.0% |
| Consumer Cyclical | 17.27% | 0.0% |
| Basic Materials | 0.0% | 0.0% |
The Invesco QQQ Trust (QQQ) has the most exposure to the Technology sector at 45.46%. This is followed by Communication Services and Consumer Cyclical at 19.55% and 17.27% respectively. Real Estate (0.0%), Energy (0.0%), and Utilities (0.89%) only make up 0.89% of the fund’s total assets.
QQQ’s mid-section with moderate exposure is comprised of Financial Services, Industrials, Consumer Defensive, Healthcare, and Consumer Cyclical stocks at 2.51%, 2.61%, 4.68%, 7.04%, and 17.27%.
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%.
QQQ is 45.46% more exposed to the Technology sector than TQQQ (45.46% vs 0.0%). QQQ’s exposure to Communication Services and Consumer Cyclical stocks is 19.55% higher and 17.27% higher respectively (19.55% vs. 0.0% and 17.27% vs. 0.0%). In total, Real Estate, Energy, and Utilities also make up 0.89% more of the fund’s holdings compared to TQQQ (0.89% vs. 0.00%).
Holdings
| QQQ Holdings | Weight |
| Apple Inc | 11.0% |
| Microsoft Corp | 9.82% |
| Amazon.com Inc | 8.35% |
| Facebook Inc Class A | 4.01% |
| Facebook Inc A | 4.01% |
| Alphabet Inc Class C | 3.9% |
| Tesla Inc | 3.9% |
| NVIDIA Corp | 3.65% |
| Alphabet Inc Class A | 3.53% |
| Alphabet Inc A | 3.53% |
QQQ’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Facebook Inc A at 11.0%, 9.82%, 8.35%, 4.01%, and 4.01%.
Alphabet Inc Class C (3.9%), Tesla Inc (3.9%), and NVIDIA Corp (3.65%) have a slightly smaller but still significant weight. Alphabet Inc Class A and Alphabet Inc A are also represented in the QQQ’s holdings at 3.53% and 3.53%.
| 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%.
Performance
Annual Returns
| Year | QQQ | TQQQ |
| 2020 | 48.6% | 109.85% |
| 2019 | 39.12% | 133.93% |
| 2018 | -0.14% | -19.65% |
| 2017 | 32.7% | 118.65% |
| 2016 | 7.01% | 11.04% |
| 2015 | 9.54% | 17.41% |
| 2014 | 19.12% | 56.82% |
| 2013 | 36.6% | 139.98% |
| 2012 | 18.09% | 51.95% |
| 2011 | 3.44% | -7.77% |
| 2010 | 19.89% | 0.0% |
QQQ had its best year in 2020 with an annual return of 48.6%. QQQ’s worst year over the past decade yielded -0.14% and occurred in 2018. In most years the Invesco QQQ Trust provided moderate returns such as in 2012, 2014, and 2010 where annual returns amounted to 18.09%, 19.12%, and 19.89% 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 |
| QQQ | $10,000 | $63,827 | 21.27% |
| TQQQ | $10,000 | $593,012 | 61.22% |
A $10,000 investment in QQQ would have resulted in a final balance of $63,827. This is a profit of $53,827 over 10 years and amounts to a compound annual growth rate (CAGR) of 21.27%.
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%.
QQQ’s CAGR is 39.95 percentage points lower than that of TQQQ and as a result, would have yielded $529,185 less on a $10,000 investment. Thus, QQQ performed worse than TQQQ by 39.95% annually.
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