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TQQQ vs. VOE: What’s The Difference?

The ProShares UltraPro QQQ (TQQQ) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. TQQQ is a ProShares Trading–Leveraged Equity fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between TQQQ and VOE? And which fund is better?

The expense ratio of TQQQ is 0.88 percentage points higher than VOE’s (0.95% vs. 0.07%). TQQQ also has a lower exposure to the technology sector and a higher standard deviation. Overall, TQQQ has provided higher returns than VOE over the past 10 years.

In this article, we’ll compare TQQQ vs. VOE. We’ll look at fund composition and holdings, as well as at their portfolio growth and performance. Moreover, I’ll also discuss TQQQ’s and VOE’s risk metrics, industry exposure, and annual returns and examine how these affect their overall returns.

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Summary

TQQQVOE
NameProShares UltraPro QQQVanguard Mid-Cap Value Index Fund ETF Shares
CategoryTrading–Leveraged EquityMid-Cap Value
IssuerProSharesVanguard
AUM12.41B26.78B
Avg. Return61.22%12.52%
Div. Yield0.0%1.87%
Expense Ratio0.95%0.07%

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 Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.

TQQQ’s dividend yield is 1.87% lower than that of VOE (0.0% vs. 1.87%). Also, TQQQ yielded on average 48.70% more per year over the past decade (61.22% vs. 12.52%). The expense ratio of TQQQ is 0.88 percentage points higher than VOE’s (0.95% vs. 0.07%).

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Fund Composition

Industry Exposure

TQQQ vs. VOE - Industry Exposure

TQQQVOE
Technology0.0%9.85%
Industrials0.0%9.4%
Energy0.0%5.69%
Communication Services0.0%5.27%
Utilities0.0%10.93%
Healthcare0.0%7.04%
Consumer Defensive0.0%4.85%
Real Estate0.0%11.48%
Financial Services0.0%18.26%
Consumer Cyclical0.0%11.8%
Basic Materials0.0%5.44%

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 Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.

VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.

TQQQ is 9.85% less exposed to the Technology sector than VOE (0.0% vs 9.85%). TQQQ’s exposure to Industrials and Energy stocks is 9.40% lower and 5.69% lower respectively (0.0% vs. 9.4% and 0.0% vs. 5.69%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 41.54% less of the fund’s holdings compared to VOE (0.00% vs. 41.54%).

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%.

VOE - Holdings

VOE HoldingsWeight
Carrier Global Corp Ordinary Shares1.28%
International Flavors & Fragrances Inc1.13%
Motorola Solutions Inc1.12%
Discover Financial Services1.09%
Welltower Inc1.05%
Corteva Inc0.99%
Valero Energy Corp0.97%
Corning Inc0.95%
Willis Towers Watson PLC0.9%
D.R. Horton Inc0.89%

VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.

Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.

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Risk Analysis

TQQQVOE
Mean Return4.651.05
R-squared83.6488.76
Std. Deviation50.0815.98
Alpha7.29-3.77
Beta3.371.11
Sharpe Ratio1.10.75
Treynor Ratio15.6510.19

The ProShares UltraPro QQQ (TQQQ) has a Standard Deviation of 50.08 with a Treynor Ratio of 15.65 and a Mean Return of 4.65. Its Alpha is 7.29 while TQQQ’s R-squared is 83.64. Furthermore, the fund has a Beta of 3.37 and a Sharpe Ratio of 1.1.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Mean Return of 1.05 with a Standard Deviation of 15.98 and a Sharpe Ratio of 0.75. Its Alpha is -3.77 while VOE’s Treynor Ratio is 10.19. Furthermore, the fund has a Beta of 1.11 and a R-squared of 88.76.

TQQQ’s Mean Return is 3.60 points higher than that of VOE and its R-squared is 5.12 points lower. With a Standard Deviation of 50.08, TQQQ is slightly more volatile than VOE. The Alpha and Beta of TQQQ are 11.06 points higher and 2.26 points higher than VOE’s Alpha and Beta.

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Performance

Annual Returns

TQQQ vs. VOE - Annual Returns

YearTQQQVOE
2020109.85%2.5%
2019133.93%27.98%
2018-19.65%-12.41%
2017118.65%17.05%
201611.04%15.26%
201517.41%-1.8%
201456.82%13.98%
2013139.98%37.65%
201251.95%16.04%
2011-7.77%-0.32%
20100.0%21.83%

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 2013 was the strongest year for VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.

Portfolio Growth

TQQQ vs. VOE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
TQQQ$10,000$593,01261.22%
VOE$10,000$27,62512.52%

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 VOE, the end total would have been $27,625. This equates to a $17,625 profit over 10 years and a compound annual growth rate (CAGR) of 12.52%.

TQQQ’s CAGR is 48.70 percentage points higher than that of VOE and as a result, would have yielded $565,387 more on a $10,000 investment. Thus, TQQQ outperformed VOE by 48.70% annually.


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