SSO Offers Lower Risk Than TQQQ for Leveraged ETF Traders

ProShares - UltraPro QQQ (NASDAQ:TQQQ) and ProShares - Ultra S&P500 (NYSEMKT:SSO) both seek to magnify index returns with daily leverage, but TQQQ targets triple exposure to the tech-heavy Nasdaq-100, while SSO offers double exposure to the broader S&P 500.

TQQQ and SSO are leveraged exchange-traded funds designed for aggressive traders looking to multiply daily market moves. TQQQ delivers 3x the daily performance of the Nasdaq-100, leading to higher potential gains and losses, while SSO tracks 2x the daily returns of the S&P 500, offering broader sector exposure. This comparison unpacks how their costs, risk, and makeup stack up for those considering leveraged ETF strategies.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.

SSO is slightly more affordable on fees, with a 0.88% expense ratio compared to TQQQ’s 0.97%, and its yield is higher than TQQQ’s. For those sensitive to costs, SSO may appeal more.

Performance & risk comparison

What's inside

SSO gives leveraged exposure to the S&P 500, with a 19.7-year track record and a portfolio spanning 519 holdings. Its sector mix is led by technology at 34%, followed by financial services and communication services. Top holdings include the ProShares Genius Money Market ETF, Nvidia, and Apple. SSO, like TQQQ, resets leverage daily—this quirk means compounding can lead to results that differ from simply multiplying the index’s returns over time.

TQQQ, by contrast, is concentrated on the Nasdaq-100, with a heavier tilt toward technology (53%), and significant weightings in communication services and consumer discretionary stocks. Its largest positions are similar, with the ProShares Genius Money Market ETF, Nvidia, and Apple dominating the top slots. Both funds’ daily leverage reset feature makes them best suited for short-term tactical use rather than long-term buy-and-hold strategies.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

Both the SSO and TQQQ ETFs rely on leverage to supercharge their returns. That means they deliver multiples of the performance of their underlying indexes, in this case, 2 times the daily returns of the S&P 500 for SSO, and 3 times the daily returns of the Nasdaq-100 for TQQQ. Leverage can lead to massive gains but equally massive losses, depending on the direction of the index, so this type of investing is high-risk and primarily used for short-term market timing rather than long-term investing.

You can see the inherent volatility play out in the numbers above. Both indexes have more than doubled a $1,000 investment over the last five years, but not without massive drawdowns of more than 80% for TQQQ and more than 45% for SSO. Between the two, TQQQ is probably the riskier option, as it aims to triple the returns of a more concentrated index, the tech-heavy Nasdaq-100. With artificial intelligence, quantum computing, and other tech advances in the spotlight, maximizing the returns of an already hot sector may seem tempting, and it could be lucrative. But as the ETF resets daily, you’ll need to keep a near constant eye on its performance and be able to predict the best times to jump in and out. That makes it a pretty unsustainable bet for the average investor.

Sarah Sidlow has positions in Apple and Nvidia. The Motley Fool has positions in and recommends Apple and Nvidia and is short shares of Apple. The Motley Fool has a disclosure policy.