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Leveraged TQQQ tracks QQQ in lockstep, mirroring semiconductor moves
A Yahoo Finance analysis says TQQQ is a 3x daily leveraged version of QQQ, and over the past six months their price moves have shown little separation despite different underlying exposure.
Yahoo Finance highlights how several high-profile market themes may be more alike than investors expect, pointing to the close relationship between the iShares Semiconductor ETF (SOXX) and the ProShares Ultrapro QQQ ETF (TQQQ).
The article explains that TQQQ is designed to deliver 3x daily leverage on the Invesco QQQ Trust (QQQ), and argues that investors can end up with similar return and risk tradeoffs even when they believe they are picking distinct exposures.
According to the analysis, SOXX and QQQ overlap only partially, with about one-third of holdings shared between the ETFs, as QQQ holds 100 stocks while SOXX holds 35, including 17 common names.
Yahoo Finance also notes that for the past six months, there has been little daylight between how the pair moves, suggesting that “levering up” QQQ can produce a pattern that closely resembles the unleveraged ETF’s up and down behavior.