TQQQ ETF Barely Outpaces QQQ Despite Its 3X Leverage

ProShares is upfront about what its UltraPro QQQ (NASDAQ:TQQQ), the biggest leveraged Nasdaq ETF, does. It aims for three times the Nasdaq-100’s return for a single day. Over any longer stretch, its own fund page warns, “your return may be higher or lower than the Daily Target.”

This year shows how far apart the two can drift. The Invesco QQQ Trust (NASDAQ:QQQ), which tracks the Nasdaq-100, has returned 13% this year to Wednesday’s close, dividends included. Three times that would be 38%. But, TQQQ is up 15%, only a little ahead of the fund it triples every day.

Explainer: How leveraged ETFs like TQQQ work

• TQQQ adds borrowed exposure, mostly through swaps with banks, to move three times as much as the Nasdaq-100 in a day.
• It resets that exposure at every close, so each day’s result becomes the base for the next.
• A steady climb helps: ten straight 1% gains lift the index 10.5% and a 3x fund 34%, more than three times as much.
• Swings hurt: a 10% fall followed by a 10% rise leaves the index down 1% and a 3x fund down 9%.
• A one-day fall of a third in the index would wipe a 3x fund out.
• Over a week it stays close to three times the index. Over a year it can land far from it.
• It costs more to run: a higher fee plus interest on the borrowed exposure.

A choppy year worked against it

2026 has swung hard, and the swings did most of the damage. By 30 March, QQQ was down 9% for the year and TQQQ 28%. The spring rally then carried TQQQ to a record on 2 June, up 66% on the year. QQQ kept climbing until its own record on 6 October, and TQQQ never got back to its June high.

Then came the slide. On 5 November, the AI trade sold off after the midterms. TQQQ fell 19% that day, its worst day since March 2020. Since 6 October, it has lost 28%, about three times QQQ’s drop.

A fund that tripled QQQ’s return every single day this year, with no fees or other costs, would be up about 26%. The swings alone cost it 12 points.

Then the costs

TQQQ’s expense ratio is 0.94%, against QQQ’s 0.18%. The fee is the smaller part of the bill. To move three times as much as its own assets, TQQQ in effect borrows twice its assets through its swaps, and pays short-term interest on that money.

With short-term rates near 4%, the interest dwarfs the fee. By our measure, the fee and the borrowing together are costing TQQQ about 10% a year in 2026, against about 2% in 2021, when rates sat near zero.

That bill comes straight out of returns. This year, it has taken about 10 points off TQQQ’s return. That is the rest of the gap to three times QQQ. 2024 shows it even more clearly: the swings were mild, and tripling QQQ every day would have returned about 80%. TQQQ returned 59%.

Great in steady years, harsh in flat ones

The same reset that hurt this year pays off when the Nasdaq climbs in a fairly straight line. In 2023, QQQ returned 55% and TQQQ 203%, more than three times as much. 2019 went the same way.

A flat or falling year runs the other way. In 2018, QQQ ended about where it started and TQQQ lost 20%. In 2022, QQQ lost 33% and TQQQ 79%.

Can you hold it for a few months?

How long you hold TQQQ changes what you get. Over a week, it landed within 2 points of three times QQQ’s return 99% of the time since 2010. Over a year, only 9% of the time.

A common plan is to buy TQQQ, hold it for a few months and sell after a strong run. We looked at every six-month stretch since 2010. TQQQ beat QQQ in about seven out of ten of them. The ones it lost followed a pattern.

When QQQ ended a six-month stretch within 5% of where it started, TQQQ lost money three times out of four. A sideways market is enough to shrink it. Even when QQQ rose, TQQQ trailed it 13% of the time.

Crashes can arrive inside the window too. TQQQ fell 70% in a month in early 2020 and was back to its high by July. The 2022 bear market went differently: TQQQ lost 82% from November 2021, and holders waited until July 2024 to get back to even.

Buyers kept coming

None of this has cooled demand. Investors put $4.3 billion into TQQQ in the month to 10 November, about a tenth of its assets. More than half of it, $2.3 billion, arrived in the week of the 5 November drop.

Over days and weeks, TQQQ does what it says: about three times QQQ’s move. Held for months or years, it turns into a bet on the path. A steady climb rewards it richly. A choppy or sideways market can leave it with a loss even as QQQ edges higher, and its costs keep running either way. That is why ProShares sets its target one day at a time and suggests holders consider monitoring their positions periodically.

TQQQ pays for a straight line and charges for every zigzag.

Disclosure: Data as of 11 November 2026. This is not investment advice or a recommendation to buy or sell any security. We receive no compensation from the issuers of the funds mentioned. Our managers may or may not hold positions in the funds mentioned.

First published in the ETF Copilot newsletter.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.