ProShares UltraPro QQQ Overview
ProShares UltraPro QQQ (TQQQ) is a passively managed Miscellaneous Trading--Leveraged Equity exchange-traded fund (ETF). ProShares launched the ETF in 2010.
The investment seeks daily investment results, before fees and expenses, that correspond to three times (3x) the daily performance of the NASDAQ-100 Index®. The fund invests in financial instruments that ProShare Advisors believes, in combination, should produce daily returns consistent with the Daily Target. The index includes 100 of the largest domestic and international non-financial companies listed on The Nasdaq Stock Market based on market capitalization. The fund is non-diversified.
About ProShares UltraPro QQQ (TQQQ)
There are 2 members of the management team with an average tenure of 8.21 years: Michael Neches (2013) and Devin Sullivan (2018). Management tenure is more important for actively managed ETFs than passive index ETFs.
The ETF has 1 primary benchmark: NASDAQ 100 TR USD index with a weighting of 300%. ProShares UltraPro QQQ has 130 securities in its portfolio. The top 10 holdings constitute 40.6% of the ETF’s assets. The ETF meets the SEC requirement of being classified as a nondiversified fund. The ETF is not considered to have an ESG focus with its investment selection and management.
ProShares UltraPro QQQ is part of the Miscellaneous global asset class and is within the Miscellaneous ETF group. ProShares UltraPro QQQ has 1.7% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 60.4% There is 1.7% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 10.5% (10.5% domestic bond, 0.0% foreign bond and 0.0% convertible bond). ProShares UltraPro QQQ has 27.5% of the portfolio in cash.
Assets Under Management
ProShares UltraPro QQQ has a trailing dividend yield of 1.1%, which is below the 3.1% category average. The fund normally distributes its dividend income quarterly.
It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.
TQQQ Performance and Fees
High portfolio turnover can translate to higher expenses and lower aftertax returns. ProShares UltraPro QQQ has a portfolio turnover rate of 168%, which indicates that it holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 48% for the Trading--Leveraged Equity category.
Recently, in the month of March 2024, ProShares UltraPro QQQ returned 2.1%, which earned it a grade of D, as the Trading--Leveraged Equity category had an average return of 7.0%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all ETFs in that category.
ProShares UltraPro QQQ Grades
Year to date, the ETF has returned 22.1%, 5.0 percentage points better than the category, which translates into a grade of B. The fund has returned 121.3% over the past year (grade of A), 11.6% over the past three years (grade of B) and 34.9% per year over the past five years (grade of A) and 37.8% per year over the past 10 years (grade of A).
For more ETF grades, analysis and screening tools to help your investment discovery, join AAII for a $2, full-access trial. Learn more here: https://invest.aaii.com/membership.
Otherwise, for more information about ProShares UltraPro QQQ, including its riskiness, submit your email to unlock the rest of the article.
Want to continue reading?
Gain access to exclusive AAII member-only content.
Already a member? Sign in
FAQs
TQQQ, also known as Proshares Ultrapro QQQ, is one of the largest leveraged ETFs that tracks the Nasdaq-100 index. TQQQ is typically used by day traders because it was built for short-holding periods.
Which is better, TQQQ or QQQ? ›
QQQ tracks the Nasdaq-100 Index passively, while TQQQ is highly levered. TQQQ seeks daily returns that are three times those of the QQQ (before fees and expenses.) QQQ experiences smaller price fluctuations and is considered to be less risky than TQQQ.
How long can you hold TQQQ? ›
While the Fund has a daily investment objective, you may hold Fund shares for longer than one day if you believe it is consistent with your goals and risk tolerance. For any holding period other than a day, your return may be higher or lower than the Daily Target. These differences may be significant.
Is TQQQ a good stock to buy? ›
Experts caution that investing in TQQQ may offer magnified returns but also comes with magnified risk. The fund aims to provide 3x the daily performance of the NASDAQ 100, primarily focused on tech stocks with larger weightings in the 'Magnificent 7'.
What are the disadvantages of TQQQ? ›
Leverage risk
TQQQ's triple leverage can significantly magnify losses. As a result, it is a highly volatile investment and is generally considered unsuitable for long-term investing.
Is ProShares UltraPro QQQ a good investment? ›
Although the ProShares UltraPro QQQ has delivered strong returns since its 2010 inception, that is not a guarantee that it will continue to do so. Since it seeks to triple the daily return of the Nasdaq-100, it can go down quickly if the Nasdaq-100 isn't performing well.
What is the downside to investing in QQQ? ›
The QQQ ETF offers buy-and-hold investors low expenses and long-term growth potential with enough diversification to avoid the risks of betting on one company. On the downside, long-term investors in QQQ must deal with sector risk, possible overvaluation, and the absence of small caps.
How often does Tqqq pay dividends? ›
TQQQ Dividend Information
TQQQ has a dividend yield of 1.08% and paid $0.70 per share in the past year. The dividend is paid every six months and the last ex-dividend date was Mar 20, 2024.
Who is the largest holder of Tqqq? ›
Largest Shareholders of TQQQ
| Fund/Manager Name | % of Portf. | Shares Owned |
|---|
| Flow Traders US Llc | 5.04% | $ 94.32M |
| Jump Financial LLC | 1.18% | $ 43.20M |
| Paragon Advisors LLC | 15.09% | $ 37.45M |
| Cantor Fitzgerald L P | 7.74% | $ 33.80M |
6 more rowsWarning. As we mentioned, there are large risks trying to use TQQQ to profit from market moves. There is a constant downward price bias and the risk of loss grows the longer one holds the fund. This is especially true with higher interest rates as the carrying cost to leverage the fund 3X go up with higher rates.
So when QQQ suffered a 37% drawdown from its November 2021 high, TQQQ was hit with a drawdown of over 82%. To get back to even from there, TQQQ would need to make back over 450%. And as we saw in Figure 1, it still has quite a way to go. You might not yet be convinced of the danger of holding TQQQ over the long term.
Why shouldn't you hold TQQQ long term? ›
Don't hold it long term for anything more than your “play money”, which for those that even allow for “play money” in their IPS is no more than 5%. The biggest risk is a sideways choppy market. You will get killed from the volatility in that environment.
Why is TQQQ so popular? ›
QQQ appears to be the single best long-term investment option for investors seeking total returns due to its ability to expose holders to top U.S. companies on an ongoing basis. The Nasdaq 100 has consistently outperformed the S&P 500 in terms of total returns, making it a favorable choice for long-term investors.
Why do people trade TQQQ? ›
The performance of an investment option is often one of the most critical aspects investors consider. TQQQ is a leveraged ETF that aims to generate 3x the performance of the Nasdaq 100 Index. As a result, since QQQ tracks the performance of the Nasdaq 100 index, we expect TQQQ to generate higher returns than QQQ.
What is the average return of TQQQ? ›
Total Return Ranking - Trailing
| Period | TQQQ Return | Category Return High |
|---|
| YTD | 27.8% | 91.6% |
| 1 Yr | 104.4% | 248.3% |
| 3 Yr | 11.2%* | 53.9% |
| 5 Yr | 36.1%* | 62.9% |
1 more row