Better High-Growth ETF: TQQQ vs. SOXL
Key Points
TQQQ charges a slightly higher expense ratio but offers a notably higher dividend yield than SOXL.
SOXL is more volatile, with a much deeper five-year drawdown and higher beta versus TQQQ.
TQQQ diversifies across more sectors and holdings, while SOXL is concentrated solely in semiconductors.
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Direxion Daily Semiconductor Bull 3X Shares (NYSEMKT:SOXL) and ProShares - UltraPro QQQ (NASDAQ:TQQQ) both deliver 3x daily leverage but differ sharply in sector focus, recent returns, and risk profile.
SOXL targets 3x the daily performance of a semiconductor index, while TQQQ tracks 3x the daily return of the Nasdaq-100. Both are highly speculative, short-term trading tools, but their diversification and performance patterns diverge meaningfully.
Snapshot (cost & size)
| Metric | SOXL | TQQQ |
|---|---|---|
| Issuer | Direxion | ProShares |
| Expense ratio | 0.89% | 0.97% |
| 1-yr return (as of Dec. 12, 2025) | 46.6% | 20.7% |
| Dividend yield | 0.5% | 1.4% |
| Beta | 5.32 | 3.47 |
| AUM | $13.9 billion | $29.3 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.
TQQQ carries a marginally higher expense ratio, but its higher dividend yield may appeal to those seeking a little more income from a leveraged ETF.
Performance & risk comparison
| Metric | SOXL | TQQQ |
|---|---|---|
| Max drawdown (5 y) | (90.51%) | (81.76%) |
| Growth of $1,000 over 5 years | $1,427 | $2,564 |
What's inside
ProShares - UltraPro QQQ (TQQQ) amplifies exposure to the Nasdaq-100, blending technology (54%), communication services (17%), and consumer cyclicals (13%) across 123 holdings. Its largest positions are Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT). The fund’s 15.8-year track record and broad sector mix may reduce single-industry risk compared to more concentrated leveraged products. Like SOXL, TQQQ resets its leverage daily, which can compound losses in volatile markets.
Direxion Daily Semiconductor Bull 3X Shares (SOXL) offers pure-play, triple-leveraged exposure to the semiconductor industry, with 100% technology sector exposure. Top holdings include Broadcom (NASDAQ:AVGO), Advanced Micro Devices (NASDAQ:AMD), and Micron Technology (NASDAQ:MU). This singular focus can amplify both gains and losses when chip stocks swing, and the daily leverage reset quirk means long-term returns may diverge from expectations, especially in choppy markets.
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What this means for investors
Both the ProShares - UltraPro QQQ (TQQQ) and Direxion Daily Semiconductor Bull 3X Shares (SOXL) ETF contain a measure of volatility, but that comes with the territory as they seek to deliver strong returns for investors. But a key factor setting them apart is their approach.
TQQQ provides broader diversification across industries, which can help to reduce risk, while SOXL's focus on semiconductor companies can amplify volatility. Right now, the semiconductor sector is enjoying a heyday as the rapid growth of the artificial intelligence market drives up stocks such as Broadcom. But this industry goes through cyclical ups and downs, and when a downturn eventually hits, the SOXL ETF's returns could suffer.
For this reason, SOXL is more for investors who want to ride the AI wave in the short term, then exit. TQQQ's holdings in solid stocks such as Apple, which reached an all-time high of $288.62 on Dec. 3, make it a better choice for those who want exposure to big names in the AI market, but without the concentration risk of SOXL.
Glossary
Expense ratio: The annual fee, as a percentage of assets, that a fund charges its investors.
Dividend yield: Annual dividends paid by a fund divided by its current share price, expressed as a percentage.
Beta: A measure of a fund's volatility compared to the overall market, typically the S&P 500.
Leverage (3x): Use of financial instruments to amplify daily returns by three times the underlying index's movement.
Max drawdown: The largest percentage drop from a fund's peak value to its lowest point over a specific period.
Nasdaq-100: An index of 100 of the largest non-financial companies listed on the Nasdaq stock exchange.
Semiconductor index: A market index tracking the performance of companies involved in semiconductor manufacturing and design.
Assets Under Management (AUM): The total market value of assets managed by a fund.
Daily leverage reset: The process of rebalancing a leveraged fund's exposure each day to maintain its target leverage ratio.
Sector diversification: Investment spread across multiple industry sectors to reduce risk from any single sector.
Pure-play: A fund or company focused exclusively on a single industry or sector.
Compounding losses: The effect where repeated losses in a leveraged fund can magnify declines over time, especially in volatile markets.
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Robert Izquierdo has positions in Advanced Micro Devices, Apple, Broadcom, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Microsoft, and Nvidia. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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