TQQQ: Now Is A Bad Time To Own This Fund (Rating Downgrade)
Summarize this article with:
A.J. Button12.63K FollowersFollow5ShareSavePlay(9min)CommentsSummaryThe ProShares UltraPro QQQ ETF uses leverage to deliver three times the NASDAQ-100's daily return.The fund's high leverage is a virtue in times when expected returns are high, but today, NASDAQ-100 stocks trade at nosebleed multiples.Data from Invesco indicates that the NASDAQ-100 trades at 43 times earnings. That's among the steepest multiples in the index's history.It is likely that the NASDAQ-100 index will not do as well in the next 10 years as it did in the last 10.In light of the above, TQQQ's heavy use of leverage is not a positive. NASDAQ MarketSite - Times Square hapabapa/iStock Editorial via Getty Images The ProShares UltraPro QQQ ETF (TQQQ) is one of the world’s most popular leveraged index funds. Much like the Invesco QQQ Trust (QQQ), TQQQ is built on the NASDAQ-100 index. Unlike QQQ, TQQQ uses heavy amounts ofThis article was written byA.J. Button12.63K FollowersFollowFinancial journalist. Passed CFA Level 1. Seeking value and dividend growth opportunities, and sharing what I find on Seeking Alpha.Analyst’s Disclosure:I/we have a beneficial long position in the shares of GOOGL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.