TQQQ delivers 3× the Nasdaq-100's return, but only one day at a time. The fund resets each night, so over longer stretches you don't get a clean 3× of the index.
When the index drops 10% then recovers 10%, QQQ ends near flat. TQQQ swings 3× harder, but its recovery is off a smaller base, so it lands 9% down. That gap is beta slippage. It hits hardest on stocks that are volatile but rarely trend.
In practice, the damage depends entirely on what the underlying actually does. In a sustained uptrend, each daily gain compounds on the last and slippage barely registers. The sideways and whipsaw markets are what hit hardest. The Nasdaq-100 has spent most of the past sixteen years in the trending regime.
The table below shows the result: TQQQ has outperformed QQQ across the majority of rolling holding periods since inception.
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| Hold period | Winner | TQQQ outcome | |
|---|---|---|---|