SQQQ ProShares UltraPro Short QQQ
SQQQ Fund Description
The ProShares UltraPro Short QQQ provides 3x inverse exposure to a modified market-cap-weighted index of 100 of the largest nonfinancial issues listed on the NASDAQ.
SQQQ FactSet Analytics Insight
SQQQ is the most aggressive of the 3 ProShares
“a trading tool as opposed to an investment vehicle” funds providing inverse exposure to the NASDAQNasdaq-100. The fund provides geared inverse (-3x) exposure to the Nasdaq-100—a 100-company index of firms listed on the tech-heavy NASDAQNasdaq that excludes financials. To provide this exposure, the fund uses swaps on the popular NASDAQNasdaq-100 ETF QQQ, swaps on the index itself, and futures. As with most inverse and leveraged products, SQQQ is designed to provide this exposure on a daily basis, not over long time horizons. Holding the fund for longer than a day opens the door to the effects of compounding on returns and will—especially in volatile markets—be unlikely to realize the stated -3x inverse exposure over time. This effect is magnified as you add leverage. The fund typically trades briskly, which speaks to the fund's utility as a trading tool as opposed to an investment vehicle. It also explains why so many seem willing to stomach the steep expense ratio of the fund.
SQQQ FactSet Analytics Block Liquidity
This measurement shows how easy it is to trade a $1 million USD block of SQQQ. SQQQ is rated a 5 out of 5.