ETF Battles: QQQM vs. MQQQ vs. SPYQ vs. QLD - Leverage Mania!

Well, in this episode, we're diving into the high octane world of leveraged ETFs and another audience requested matchup. This time between four leveraged ETFs with different reset frequencies, but on indexes that you're probably familiar with. So whether you're chasing momentum or hedging tactically, these are tools that can supercharge your strategy if you know how to use them, stick around. We're going to get to the bottom of this matchup.

Well, this is ETF Battles and I'm Ronda Ley and a warm welcome to all. Hit that like button if you've been enjoying our program and do join our community by subscribing. We're almost at 60,000 subscribers and a big thanks to all of our loyal fans. We could not have done it without you. Tell your 10 million friends and in no time we'll be above 100,000.

Visit this comment section below if you'd like to send us an ETF battle request. Send me your ETF ticker symbols. We can do double, triple, and quadruple headers. You can also find us on X. Our feed is ETF guide. And also be sure to check our double or double check our season 6 ETF playlist to make sure that we're not doing any battle matchups or requesting any matchups that we've already done. Also the video description section below has links to our program sponsor direction. Lots of choices beyond broad market indexes. They've got ETFs linked to industry sectors along with MAG 7 and single stocks like Nvidia, Planter, Tesla, and many others. So, be sure to hit that description section below. You can also visit direction.com.

So today's ETF battle was sent to us by a viewer named Gladstone, a loyal viewer who's been chasing us, following me, hunting me down, making sure that we're going to do today's matchup and specifically requesting this particular judging pair of Shaina and Dave, which we'll introduce them in a second. We've got ETFs from Trader and ProShares and it's QLD versus MQQ versus QQQP versus SPYQ. Lots of Q's. And judging today's ETF contest, we got the queen of alts, Shaina Sisle with Bandrian Capital and Dave Crinces with ETF Portfolio Management. Judges, thank you both for being here.

Hey guys, let's battle. I am very excited about this battle and I fear that Dave may not like me after it. All right. Well, let's see. Let's see, this might turn out to be a battle of philosophies beyond a battle of ETFs. We've got our four categories of cost, exposure, strategy, performance. And then we've got, of course, our mystery battle category, which is where our judges can pick a certain factor, a thing that they think is pertinent and crucial to today's contest.

Judges can also nominate wild card ETFs if they feel there's a better choice elsewhere. They can also opt for split decisions, pass. I'm pretty liberal. So they can pretty much do with whatever they want except use foul language. I've got the scorekeeping chores. At the end of the program, we will declare an overall winner. Keep in mind, none of the battle outcomes are ever predetermined or known in advance by myself or our judges. The first category or category is cost. So, let's get started with Dave.

Ron. I don't know how Shaina could say that because I love everybody, but you know, big thanks to our viewer Gladstone for requesting this battle. This is a very interesting leveraged ETF rebalancing matchup. Now, I have said many times on previous battles that levered ETFs are the future of investing and investors now have a wide range to choose from. Among these battle ETFs, QLD is the cheapest, although we do prefer wildcard TQQQ for even cheaper exposure to the NASDAQ 100 with three times leverage. So on a value adjusted basis, I give the win on cost to wildcard TQQQ and then to QLD second.

Wild card so early in this episode. An epic battle, but we'll take it. Thank you very much, Dave, for that excellent analysis. Taking us next is cost. Shaina, please give us your breakdown.

So, the reason I think Dave's going to dislike me after this battle is I actually completely disagree. I think these are awful products. I hope they're not the future. I think leverage is the future, but not this way. And we'll go there as we get into other categories, but I do agree with Dave in QLD being the winner of this battle. The other three are much more expensive. And as much as I tried, I was unable to find a lot of information on their trading liquidity, and my assumption behind that is they're very small funds that don't really trade. So there isn't really much data of which to take from in order to get much information about liquidity and that in of itself is a red flag about the liquidity of the funds.

Yeah, good point. And the AUM on these trader ETFs is very low obviously contributing to that lack of what you call trading volume and certainly that that's something that investors need to be aware of. Thank you for bringing that up Shaina. Next up is exposure strategy. And Shaina, you're still up. So, break it down for us. How do you see it?

So, I want to start by saying that these are not funds that are meant for long-term hold holds. Especially not QLD. In fact, there is a major disclaimer on the landing page for that fund saying this is not meant for being held for more than a day. We'll get into the the trader funds and how they're a little bit different. I'm sure but from the status of the exposure strategy all four of these funds are two times levered to a respective index QLD MQ and QQQP to the NASDAQ 100 and SPY to the S&P 500.

Levered funds are using derivatives to gather their leverage and they are levered not just on upside but on downside. So you have to have really high conviction in the outperformance of this particular index if you're going to invest in these especially QLD. It it's a trading fund. It is not meant to be held for more than a day. It resets daily. But the aspect of this that is worth noting is that if you go up 100% that's great, but if you go down 100% you got to go up 200%. To get your money back. So it magnifies the risk.

And so volatility in these markets can be high and volatility is not your friend when you're looking at levered ETFs because you have to get double the return of the downside to match, you know, the potential upside. So you really got to get it right. And that's why I don't typically suggest using these products at all unless you are an active trader and you're looking to hedge or really convey a high conviction and in something to happen in a very short time period. So, for as far as exposure strategy goes, like I said, they're all two time levered. They do reset at different times, which makes the ones that reset monthly and quarterly a little less volatile and maybe not as risky, but I'm going to also throw in a wild card here early.

I'm a big believer in the use of leverage for smart reasons, as a way to manage risk, not as a way to magnify risk. In this case, leverage is being used to magnify potential risk, but also magnify outperformance. More risk, more return. That's the whole name of the game. But I'm a big fan of using leverage as a way to manage risk. So and and long short is using leverage because you can have more long exposure and manage risk by your short exposure.

And then there's a new type of theme use of leverage which is this idea of return stacking. Corey Hoffstein is sort of the person the mastermind behind the idea of return stacking which is actually stacking and using leverage to gain equal exposure. So if you have for example they do this a lot with alts you want to get a 100% exposure to your 6040 but you want to have alts as a diversifier. So you might leverage part of your 6040 so that you can get 100% exposure and then use that leverage to get your alt exposure so that you'll be able to get the benefit of both things without sacrificing on returns. And that's that concept of return stacking. And there's products out there that do that. One that stands out to me is RSBA, which is Corey's return stacked bonds and stock port portfolio. And he has others as well. And Wisdom Tree also has some products in this space in this concept of return stacking.

Got it. Thank you, Shaya. And also for explaining a little bit about return stacking. Very interesting. Dave, you're up next. How do you see it when it comes to exposure strategy?

For exposure, we have four levered index ETFs, each with two times exposure. And three of the ETFs, as Shaina mentioned, are for NASDAQ 100 index and one is for the S&P 500. Among the three NASDAQ 100 versions, they rebalance over different time frames. We have daily, monthly, and quarterly. Now, in general, we favor the higher exposure to tech in the NASDAQ 100 long term. And as for rebalancing frequency, different types of volatility may favor each of these different ETFs at times. So for exposure, I give the win to wildcard TQQQ for the extra leverage. And in its absence, I call it a split decision between the the three NASDAQ 100 two times funds.

All right, thank you very much. And now we move to performance. And Dave, you're up. So break it down for us. How do these ETFs look? And I know that the trader ETFs, as you you'll probably allude to and point out, do have a very short performance history. So anyway, I won't steal any thunder for you. Break it down for us.

On performance. QLD is the only battle ETF here with more than 11 months of actual trading. And this data chart shows over the past 11 months, the NASDAQ 100 outperformed the S&P and quarterly rebalancing in QQQP was best with that fund up 27%. However, in this graph of the past decade, we see that the three times wild card TQQQ returned more than one and a half times.