The ProShares UltraPro QQQ (TQQQ) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. TQQQ is a ProShares Trading–Leveraged Equity fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between TQQQ and SCHG? And which fund is better?
The expense ratio of TQQQ is 0.91 percentage points higher than SCHG’s (0.95% vs. 0.04%). TQQQ also has a lower exposure to the technology sector and a higher standard deviation. Overall, TQQQ has provided higher returns than SCHG over the past 10 years.
In this article, we’ll compare TQQQ vs. SCHG. We’ll look at portfolio growth and performance, as well as at their holdings and industry exposure. Moreover, I’ll also discuss TQQQ’s and SCHG’s annual returns, risk metrics, and fund composition and examine how these affect their overall returns.
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Summary
| TQQQ | SCHG | |
| Name | ProShares UltraPro QQQ | Schwab U.S. Large-Cap Growth ETF |
| Category | Trading–Leveraged Equity | Large Growth |
| Issuer | ProShares | Schwab ETFs |
| AUM | 12.41B | 15.16B |
| Avg. Return | 61.22% | 17.81% |
| Div. Yield | 0.0% | 0.43% |
| Expense Ratio | 0.95% | 0.04% |
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 Schwab U.S. Large-Cap Growth ETF (SCHG) is a Large Growth fund that is issued by Schwab ETFs. It currently has 15.16B total assets under management and has yielded an average annual return of 17.81% over the past 10 years. The fund has a dividend yield of 0.43% with an expense ratio of 0.04%.
TQQQ’s dividend yield is 0.43% lower than that of SCHG (0.0% vs. 0.43%). Also, TQQQ yielded on average 43.41% more per year over the past decade (61.22% vs. 17.81%). The expense ratio of TQQQ is 0.91 percentage points higher than SCHG’s (0.95% vs. 0.04%).
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Fund Composition
Industry Exposure
| TQQQ | SCHG | |
| Technology | 0.0% | 39.21% |
| Industrials | 0.0% | 3.01% |
| Energy | 0.0% | 0.2% |
| Communication Services | 0.0% | 17.07% |
| Utilities | 0.0% | 0.0% |
| Healthcare | 0.0% | 12.05% |
| Consumer Defensive | 0.0% | 2.15% |
| Real Estate | 0.0% | 1.64% |
| Financial Services | 0.0% | 7.98% |
| Consumer Cyclical | 0.0% | 15.01% |
| Basic Materials | 0.0% | 1.68% |
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%.
A Related ETF comparison SCHG vs QQQ.
The Schwab U.S. Large-Cap Growth ETF (SCHG) has the most exposure to the Technology sector at 39.21%. This is followed by Communication Services and Consumer Cyclical at 17.07% and 15.01% respectively. Energy (0.2%), Real Estate (1.64%), and Basic Materials (1.68%) only make up 3.52% of the fund’s total assets.
SCHG’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 2.15%, 3.01%, 7.98%, 12.05%, and 15.01%.
TQQQ is 39.21% less exposed to the Technology sector than SCHG (0.0% vs 39.21%). TQQQ’s exposure to Industrials and Energy stocks is 3.01% lower and 0.20% lower respectively (0.0% vs. 3.01% and 0.0% vs. 0.2%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 24.63% less of the fund’s holdings compared to SCHG (0.00% vs. 24.63%).
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%.
| SCHG Holdings | Weight |
| Apple Inc | 11.49% |
| Microsoft Corp | 10.91% |
| Amazon.com Inc | 7.89% |
| Facebook Inc A | 4.45% |
| Alphabet Inc A | 3.93% |
| Alphabet Inc Class C | 3.82% |
| Tesla Inc | 2.8% |
| NVIDIA Corp | 2.67% |
| Visa Inc Class A | 2.12% |
| UnitedHealth Group Inc | 2.02% |
SCHG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 11.49%, 10.91%, 7.89%, 4.45%, and 3.93%.
Alphabet Inc Class C (3.82%), Tesla Inc (2.8%), and NVIDIA Corp (2.67%) have a slightly smaller but still significant weight. Visa Inc Class A and UnitedHealth Group Inc are also represented in the SCHG’s holdings at 2.12% and 2.02%.
Risk Analysis
| TQQQ | SCHG | |
| Mean Return | 4.65 | 1.46 |
| R-squared | 83.64 | 92.92 |
| Std. Deviation | 50.08 | 14.78 |
| Alpha | 7.29 | 1.97 |
| Beta | 3.37 | 1.05 |
| Sharpe Ratio | 1.1 | 1.14 |
| Treynor Ratio | 15.65 | 16.3 |
The ProShares UltraPro QQQ (TQQQ) has a R-squared of 83.64 with a Beta of 3.37 and a Treynor Ratio of 15.65. Its Mean Return is 4.65 while TQQQ’s Alpha is 7.29. Furthermore, the fund has a Sharpe Ratio of 1.1 and a Standard Deviation of 50.08.
The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Treynor Ratio of 16.3 with a Alpha of 1.97 and a Beta of 1.05. Its Sharpe Ratio is 1.14 while SCHG’s Standard Deviation is 14.78. Furthermore, the fund has a R-squared of 92.92 and a Mean Return of 1.46.
TQQQ’s Mean Return is 3.19 points higher than that of SCHG and its R-squared is 9.28 points lower. With a Standard Deviation of 50.08, TQQQ is slightly more volatile than SCHG. The Alpha and Beta of TQQQ are 5.32 points higher and 2.32 points higher than SCHG’s Alpha and Beta.
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Performance
Annual Returns
| Year | TQQQ | SCHG |
| 2020 | 109.85% | 39.13% |
| 2019 | 133.93% | 36.21% |
| 2018 | -19.65% | -1.35% |
| 2017 | 118.65% | 28.04% |
| 2016 | 11.04% | 6.76% |
| 2015 | 17.41% | 3.26% |
| 2014 | 56.82% | 15.74% |
| 2013 | 139.98% | 33.96% |
| 2012 | 51.95% | 17.02% |
| 2011 | -7.77% | -0.67% |
| 2010 | 0.0% | 16.83% |
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 2020 was the strongest year for SCHG, returning 39.13% on an annual basis. The poorest year for SCHG in the last ten years was 2018, with a yield of -1.35%. Most years the Schwab U.S. Large-Cap Growth ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 15.74%, 16.83%, and 17.02% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| TQQQ | $10,000 | $593,012 | 61.22% |
| SCHG | $10,000 | $47,556 | 17.81% |
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 SCHG, the end total would have been $47,556. This equates to a $37,556 profit over 10 years and a compound annual growth rate (CAGR) of 17.81%.
TQQQ’s CAGR is 43.41 percentage points higher than that of SCHG and as a result, would have yielded $545,456 more on a $10,000 investment. Thus, TQQQ outperformed SCHG by 43.41% annually.
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