Skip to content

TQQQ vs. TLT: What’s The Difference?

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.

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

TQQQTLT
NameProShares UltraPro QQQiShares 20+ Year Treasury Bond ETF
CategoryTrading–Leveraged EquityLong Government
IssuerProSharesiShares
AUM12.41B15.15B
Avg. Return61.22%9.00%
Div. Yield0.0%1.5%
Expense Ratio0.95%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%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Holdings

TQQQ - Holdings

TQQQ HoldingsWeight
Nasdaq 100 Index Swap Goldman Sachs International45.11%
Nasdaq 100 Index Swap Societe Generale44.73%
Nasdaq 100 Index Swap Bnp Paribas38.05%
Nasdaq 100 Index Swap Bank Of America Na31.53%
Nasdaq 100 Index Swap Citibank Na31.49%
Nasdaq 100 Index Swap Jp Morgan Securities26.2%
Apple Inc7.49%
Microsoft Corp6.69%
Nasdaq 100 Index Swap Credit Suisse International5.9%
Amazon.com Inc5.68%

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 - Holdings

TLT Bond SectorsWeight
AAA100.0%
Others0.0%
Below B0.0%
B0.0%
BB0.0%
BBB0.0%
A0.0%
AA0.0%
US Government0.0%

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.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

TQQQTLT
Mean Return4.650.63
R-squared83.6468.76
Std. Deviation50.0812.76
Alpha7.29-2.83
Beta3.373.54
Sharpe Ratio1.10.55
Treynor Ratio15.651.82

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.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Performance

Annual Returns

TQQQ vs. TLT - Annual Returns

YearTQQQTLT
2020109.85%17.92%
2019133.93%14.93%
2018-19.65%-2.07%
2017118.65%8.92%
201611.04%1.36%
201517.41%-1.65%
201456.82%27.35%
2013139.98%-13.91%
201251.95%3.25%
2011-7.77%33.6%
20100.0%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

TQQQ vs. TLT - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
TQQQ$10,000$593,01261.22%
TLT$10,000$21,7939.00%

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.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!

2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.

5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply

Your email address will not be published. Required fields are marked *