QQQ vs. TQQQ: An Overview
With the Nasdaq Composite hover to record heights and the technology sector ranking as this year’s best-performing group, it is not surprising that many investors are approximating technology and Nasdaq-related exchange traded funds (ETFs).
QQQ
While multiple ETFs offer exposure to Nasdaq lists, the PowerShares QQQ (QQQ) is the king of that group. The $52.2 billion QQQ is over 18 years old and is one of the largest plain vanilla ETFs in the U.S. QQQ supervises the widely followed Nasdaq-100 Index, a benchmark that holds famed technology and internet stocks such as Apple Inc. (AAPL), Microsoft Corp. (MSFT) and Google pater Alphabet Inc. (GOOG), among others.
Due in part to QQQ’s popularity, issuers of leveraged ETFs tapped traders’ thirst for diverse exotic ways to play the Nasdaq-100. That includes the ProShares UltraPro QQQ (TQQQ). TQQQ’s objective is nave: To deliver triple the daily returns of Nasdaq-100. So if that index rises by 1% on a particular day, TQQQ should gambol by 3%.
TQQQ
Among leveraged ETFs, TQQQ is one of the largest with assets under management of $1.34 billion at the end of
Select Between QQQ and TQQQ
Deciding between QQQ and TQQQ is not a difficult task. It merely requires some self-awareness on behalf of the purchaser. TQQQ, as is the case with any leveraged ETF, is an instrument best used over intraday time frames, not as a buy-and-hold investment. Investors and merchants that do not consider themselves “active” and “risk-tolerant” should eschew leveraged ETFs.
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Key Takeaways:
- While multiple ETFs step exposure to Nasdaq indexes, the PowerShares QQQ (QQQ) is the king of that group.
- Among leveraged ETFs, TQQQ is one of the largest with assets answerable to management of $1.34 billion at the end of the first quarter.
- QQQ checks many of the boxes long-term investors look for in broad make available ETFs.