Pass on this ETF: ProShares UltraPro QQQ ETF

Article Excerpt

The PROSHARES ULTRAPRO QQQ ETF $132.07 (NASDAQ symbol TQQQ) aims to deliver 3 times the daily performance of the Nasdaq 100 Index. The underlying Nasdaq 100 Index holds well-known stocks like Apple, Microsoft and Amazon. Launched in February 2010, the ETF has gathered $6.5 billion in assets and charges a high MER of 0.95%. In that time the fund has gained 7,271% compared to the gain of 526% for the Nasdaq 100 Index. This is a spectacular performance, but it tells only part of the story. That’s because the volatility of the ETF is equally dramatic. For instance, during the market upheaval earlier this year, the fund lost 70% of its value compared to the 28% loss of the Nasdaq 100 index. In the last quarter of 2018, the ETF lost 57% of its value compared to the 21% decline for the Nasdaq 100. The fund relies on futures contracts and other derivatives to try to boost its returns. Often, leveraged ETFs like this one lose value…

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