The ProShares UltraPro QQQ (TQQQ) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. TQQQ is a ProShares Trading–Leveraged Equity fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between TQQQ and EFV? And which fund is better?
The expense ratio of TQQQ is 0.56 percentage points higher than EFV’s (0.95% vs. 0.39%). TQQQ also has a lower exposure to the technology sector and a higher standard deviation. Overall, TQQQ has provided higher returns than EFV over the past 10 years.
In this article, we’ll compare TQQQ vs. EFV. We’ll look at industry exposure and fund composition, as well as at their risk metrics and portfolio growth. Moreover, I’ll also discuss TQQQ’s and EFV’s holdings, annual returns, and performance and examine how these affect their overall returns.
|Name||ProShares UltraPro QQQ||iShares MSCI EAFE Value ETF|
|Category||Trading–Leveraged Equity||Foreign Large Value|
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%.
The iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.
TQQQ’s dividend yield is 2.94% lower than that of EFV (0.0% vs. 2.94%). Also, TQQQ yielded on average 57.23% more per year over the past decade (61.22% vs. 3.99%). The expense ratio of TQQQ is 0.56 percentage points higher than EFV’s (0.95% vs. 0.39%).
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%.
The iShares MSCI EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.
EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.
TQQQ is 2.98% less exposed to the Technology sector than EFV (0.0% vs 2.98%). TQQQ’s exposure to Industrials and Energy stocks is 11.60% lower and 6.60% lower respectively (0.0% vs. 11.6% and 0.0% vs. 6.6%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 40.61% less of the fund’s holdings compared to EFV (0.00% vs. 40.61%).
|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%|
|Nasdaq 100 Index Swap Credit Suisse International||5.9%|
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%.
|Toyota Motor Corp||2.21%|
|Commonwealth Bank of Australia||1.59%|
|HSBC Holdings PLC||1.4%|
|Rio Tinto PLC||1.1%|
EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.
HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.
The ProShares UltraPro QQQ (TQQQ) has a Mean Return of 4.65 with a Beta of 3.37 and a Standard Deviation of 50.08. Its Treynor Ratio is 15.65 while TQQQ’s Sharpe Ratio is 1.1. Furthermore, the fund has a Alpha of 7.29 and a R-squared of 83.64.
The iShares MSCI EAFE Value ETF (EFV) has a Sharpe Ratio of 0.26 with a R-squared of 92.15 and a Alpha of -1.77. Its Standard Deviation is 16.53 while EFV’s Treynor Ratio is 2.92. Furthermore, the fund has a Beta of 1.05 and a Mean Return of 0.42.
TQQQ’s Mean Return is 4.23 points higher than that of EFV and its R-squared is 8.51 points lower. With a Standard Deviation of 50.08, TQQQ is slightly more volatile than EFV. The Alpha and Beta of TQQQ are 9.06 points higher and 2.32 points higher than EFV’s Alpha and Beta.
TQQQ had its best year in 2013 with an annual return of 139.98%. TQQQ’s worst year over the past decade yielded -19.65% and occurred in 2018. In most years the ProShares UltraPro QQQ provided moderate returns such as in 2015, 2012, and 2014 where annual returns amounted to 17.41%, 51.95%, and 56.82% respectively.
The year 2013 was the strongest year for EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in TQQQ would have resulted in a final balance of $593,012. This is a profit of $583,012 over 10 years and amounts to a compound annual growth rate (CAGR) of 61.22%.
With a $10,000 investment in EFV, the end total would have been $13,698. This equates to a $3,698 profit over 10 years and a compound annual growth rate (CAGR) of 3.99%.
TQQQ’s CAGR is 57.23 percentage points higher than that of EFV and as a result, would have yielded $579,314 more on a $10,000 investment. Thus, TQQQ outperformed EFV by 57.23% annually.
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