2024-06-03 06:53:15 ET
Summary
- The ProShares UltraPro QQQ ETF gives you three times the NASDAQ-100's (daily) NAV return.
- That might sound enticing but in order to give you this 3X return, ProShares has to use extreme amounts of leverage.
- The fund's total expense ratio (0.88%) is more than four times that of the Invesco QQQ Trust. And the expense ratio does not include interest expenses or option premiums.
- Because of the fees incurred to 3X the NASDAQ-100, UltraPro QQQ does not always give the returns you'd expect. For example, it's down since 2021, while QQQ is up.
- TQQQ is a good buy during tech bear markets, but is not a buy in today's market conditions.
ProShares’ UltraPro QQQ ETF ( TQQQ ) is one of the most popular leveraged ETFs in the market. Giving you three times the daily NAV return on the NASDAQ-100 index (before fees) , it has the potential to do very well in tech bull markets. However, when we look at TQQQ’s price history, we immediately notice something peculiar: the fund is down from its 2021 highs, even though the NASDAQ-100 set new highs this year....
Read the full article on Seeking Alpha
For further details see:
ProShares UltraPro QQQ ETF: Mind The Extreme Risk