TQQQ vs. QQQ: Which Is Better? (2024)

FAQs

TQQQ vs. QQQ: Which Is Better? ›

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. Therefore, QQQ is best suited for long-term buy-and-hold investors, while TQQQ is better for active traders.

One important thing to note is that in those years when Nasdaq 100 generated negative returns, TQQQ had higher negative returns compared to QQQ. This is due to the volatility of derivatives; while they generate higher positive returns, they also generate higher negative returns.

Invesco QQQ holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, QQQ is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market.

The symbol for TQQQ is TQQQ and it is traded on the NASDAQ (NASDAQ Stock Exchange). Several short-term signals, along with a general good trend, are positive and we conclude that the current level may hold a buying opportunity as there is a fair chance for TQQQ ETF to perform well in the short-term.

The QQQ ETF offers investors big rewards during bull markets, the potential for long-term growth, ready liquidity, and low fees. QQQ usually declines more in bear markets, has high sector risk, often appears overvalued, and holds no small-cap stocks.

QQQ is perhaps best suited as a long-term investment for those who want broad exposure to the Nasdaq-100 Index. TQQQ is built for short-holding periods and is best suited for day traders.

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.

Invesco QQQ stock price stood at $485.21

According to the latest long-term forecast, Invesco QQQ price will hit $500 by the middle of 2024 and then $600 by the end of 2025. Invesco QQQ will rise to $700 within the year of 2027, $800 in 2028, $900 in 2029, $1000 in 2030, $1100 in 2032, $1200 in 2034 and $1300 in 2035.

The ProShares UltraPro QQQ ETF (NASDAQ: TQQQ) is getting a lot of attention from investors in 2024, and it's easy to see why. In the past six weeks alone, the exchange-traded fund (ETF) has gained nearly 50%, and that's on top of a stellar record of long-term performance since its 2010 inception.

Can 3X leveraged ETF go to zero? ›

Leveraged ETF prices tend to decay over time, and triple leverage will tend to decay at a faster rate than 2x leverage. As a result, they can tend toward zero.

Average Return

In the past year, QQQ returned a total of 32.95%, which is significantly higher than VOO's 26.91% return. Over the past 10 years, QQQ has had annualized average returns of 18.95% , compared to 12.90% for VOO. These numbers are adjusted for stock splits and include dividends.

Investors should note that TQQQ's leverage resets on a daily basis, which results in compounding of returns when held for multiple periods.

The ProShares UltraPro QQQ is certainly a risky, volatile ETF that isn't for investors with a low level of risk tolerance. If the Nasdaq-100 has a particularly bad market crash, it's possible to lose almost all your money.

The basic strategy is pretty simple: by holding TQQQ and some QQQ puts, you can insulate yourself from the downside and even realize a positive return if QQQ really sells off hard. Meanwhile, you have the aggressive upside offered by holding TQQQ.

Key Points. The Invesco QQQ Trust is heavily weighted to the tech and consumer discretionary sectors. Historical returns have been very impressive, comfortably outpacing the broader S&P 500. The Invesco QQQ Trust is a low-cost and low-maintenance investment vehicle.

Bottom Line on Leveraged ETFs

Leveraged ETFs decay due to the compounding effect of daily returns, volatility of the market and the cost of leverage. The volatility drag of leveraged ETFs means that losses in the ETF can be magnified over time and they are not suitable for long-term investments.

The price of TQQQ today is whatever it is today. So the short answer is yes. The longer answer is volatility decay impacts the journey of the ETF over time which is eventually reflected in the price you see today. Volatility decay's opposite is very efficient compounding during strong trends.

Leveraged ETF prices tend to decay over time, and triple leverage will tend to decay at a faster rate than 2x leverage. As a result, they can tend toward zero.

ProShares Trust - ProShares UltraPro QQQ TQQQ

There are typically 4 dividends per year (excluding specials).