The ProShares UltraPro QQQ (TQQQ) and the iShares 20+ Year Treasury Bond ETF (TLT) are both among the Top 100 ETFs. TQQQ is a ProShares Trading–Leveraged Equity fund and TLT is a iShares Long Government fund. So, what’s the difference between TQQQ and TLT? And which fund is better?
The expense ratio of TQQQ is 0.80 percentage points higher than TLT’s (0.95% vs. 0.15%). TQQQ also has a high exposure to the technology sector while TLT is mostly comprised of AAA bonds. Overall, TQQQ has provided higher returns than TLT over the past 10 years.
In this article, we’ll compare TQQQ vs. TLT. We’ll look at annual returns and fund composition, as well as at their performance and industry exposure. Moreover, I’ll also discuss TQQQ’s and TLT’s portfolio growth, risk metrics, and holdings and examine how these affect their overall returns.
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Summary
| TQQQ | TLT | |
| Name | ProShares UltraPro QQQ | iShares 20+ Year Treasury Bond ETF |
| Category | Trading–Leveraged Equity | Long Government |
| Issuer | ProShares | iShares |
| AUM | 12.41B | 15.15B |
| Avg. Return | 61.22% | 9.00% |
| Div. Yield | 0.0% | 1.5% |
| Expense Ratio | 0.95% | 0.15% |
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 20+ Year Treasury Bond ETF (TLT) is a Long Government fund that is issued by iShares. It currently has 15.15B total assets under management and has yielded an average annual return of 9.00% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 0.15%.
TQQQ’s dividend yield is 1.50% lower than that of TLT (0.0% vs. 1.5%). Also, TQQQ yielded on average 52.23% more per year over the past decade (61.22% vs. 9.00%). The expense ratio of TQQQ is 0.80 percentage points higher than TLT’s (0.95% vs. 0.15%).
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Fund Composition
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%.
| TLT Bond Sectors | Weight |
| AAA | 100.0% |
| Others | 0.0% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| BBB | 0.0% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
TLT’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
Risk Analysis
| TQQQ | TLT | |
| Mean Return | 4.65 | 0.63 |
| R-squared | 83.64 | 68.76 |
| Std. Deviation | 50.08 | 12.76 |
| Alpha | 7.29 | -2.83 |
| Beta | 3.37 | 3.54 |
| Sharpe Ratio | 1.1 | 0.55 |
| Treynor Ratio | 15.65 | 1.82 |
The ProShares UltraPro QQQ (TQQQ) has a R-squared of 83.64 with a Standard Deviation of 50.08 and a Sharpe Ratio of 1.1. Its Treynor Ratio is 15.65 while TQQQ’s Beta is 3.37. Furthermore, the fund has a Mean Return of 4.65 and a Alpha of 7.29.
The iShares 20+ Year Treasury Bond ETF (TLT) has a Standard Deviation of 12.76 with a Beta of 3.54 and a Treynor Ratio of 1.82. Its R-squared is 68.76 while TLT’s Mean Return is 0.63. Furthermore, the fund has a Alpha of -2.83 and a Sharpe Ratio of 0.55.
TQQQ’s Mean Return is 4.02 points higher than that of TLT and its R-squared is 14.88 points higher. With a Standard Deviation of 50.08, TQQQ is slightly more volatile than TLT. The Alpha and Beta of TQQQ are 10.12 points higher and 0.17 points lower than TLT’s Alpha and Beta.
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Performance
Annual Returns
| Year | TQQQ | TLT |
| 2020 | 109.85% | 17.92% |
| 2019 | 133.93% | 14.93% |
| 2018 | -19.65% | -2.07% |
| 2017 | 118.65% | 8.92% |
| 2016 | 11.04% | 1.36% |
| 2015 | 17.41% | -1.65% |
| 2014 | 56.82% | 27.35% |
| 2013 | 139.98% | -13.91% |
| 2012 | 51.95% | 3.25% |
| 2011 | -7.77% | 33.6% |
| 2010 | 0.0% | 9.25% |
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 2011 was the strongest year for TLT, returning 33.6% on an annual basis. The poorest year for TLT in the last ten years was 2013, with a yield of -13.91%. Most years the iShares 20+ Year Treasury Bond ETF has given investors modest returns, such as in 2012, 2017, and 2010, when gains were 3.25%, 8.92%, and 9.25% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| TQQQ | $10,000 | $593,012 | 61.22% |
| TLT | $10,000 | $21,793 | 9.00% |
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 TLT, the end total would have been $21,793. This equates to a $11,793 profit over 10 years and a compound annual growth rate (CAGR) of 9.00%.
TQQQ’s CAGR is 52.23 percentage points higher than that of TLT and as a result, would have yielded $571,219 more on a $10,000 investment. Thus, TQQQ outperformed TLT by 52.23% annually.
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