ETF Investors Add to Bearish Nasdaq Bets

ETF Investors Add to Bearish Nasdaq Bets

SQQQ had inflows of $554 million on Friday.

Senior ETF Analyst
Reviewed by: Lisa Barr
Edited by: Lisa Barr

Some exchange-traded fund investors doubled down on their bets against the Nasdaq-100 after the index climbed to a 14-month high. The ProShares UltraPro Short QQQ ETF (SQQQ) had inflows of $554 million on Friday, bringing its year-to-date haul to $4.6 billion. 

The fund, which seeks to deliver -3x the daily return of the Nasdaq-100, can be used to outright bet against the tech-heavy index or to hedge long positions.  

In either case, the flows into SQQQ suggest there is a cohort of investors who are getting increasingly nervous about the rapid ascent of the Nasdaq. 

The Invesco QQQ Trust (QQQ), the largest ETF tracking the index, is up 32% this year. The ETF is now down just over 13% from its all-time high set in December 2021 versus more than 35% at its low point in December 2022. 

Much has been written about the narrowness of the Nasdaq’s rally. Skeptics say that just a small group of megacap tech stocks are powering the index’s rally, including the red-hot Nvidia Corp., Apple Inc., Inc., and Microsoft Corp.—each of which is up 35% or more this year. 

In those skeptics’ eyes, that makes the Nasdaq rally precarious and at risk of a reversal should the economy turn down or should interest rates head higher because of sticky inflation. 

On the other hand, bulls might point to that fact that even though the megacaps are leading, most tech stocks are doing quite well this.  

The NASDAQ-100 Equal Weighted ETF (QQQE), which holds stocks in the Nasdaq in equal proportion, is up 15% on a year-to-date basis. Sure, it’s less than the market-cap-weighed QQQ, but it isn’t bad.  

QQQE is down 19% from its all-time high—more than the QQQ, but not drastically so. 

That fund, incidentally, has had inflows of $122 million so far this year. 

To me, the “narrowness” of the Nasdaq rally isn’t so much a concern. If you want to make the case that specific tech stocks or tech stocks in general are overvalued from a fundamental perspective, go ahead and make it. 

But to suggest stocks that are more heavily weighted in the Nasdaq are contributing more to the index’s gains and therefore the index is bound to fall isn’t a convincing argument.  


Contact Sumit Roy at [email protected] 

Sumit Roy is the senior ETF analyst for, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for, with a particular focus on stock and bond exchange-traded funds.

He is the host of’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays,’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.