Volatility metrics
Risk profiles diverge markedly. SOXL posts a five-year beta of 5.32 relative to the S&P 500, while TQQQ’s beta stands at 3.47. The disparity extends to historical drawdowns. Between late 2020 and late 2025, SOXL’s maximum peak-to-trough decline reached 90.51%, compared with 81.76% for TQQQ. Though both products are designed for short-term trading, the semiconductor-only vehicle has exhibited deeper swings during market stress.
Five-year growth of capital
A $1,000 investment made five years ago and held through Dec. 12, 2025 would have grown to $2,564 in TQQQ, versus $1,427 in SOXL. The difference illustrates how diversification across multiple sectors helped TQQQ navigate periods when semiconductor shares lagged or traded sideways.
Sector composition and holdings
TQQQ seeks three times the daily return of the Nasdaq-100, an index holding 100 of the largest non-financial companies listed on Nasdaq. As of mid-December, technology stocks represented 54% of the benchmark, communication services 17%, and consumer cyclicals 13%. Among 123 positions, the largest weightings are Nvidia, Apple and Microsoft.
SOXL targets three times the daily move of the ICE Semiconductor Index, resulting in 100% exposure to the technology sector. Top constituents include Broadcom, Advanced Micro Devices and Micron Technology. The pure-play approach can magnify gains when chip demand accelerates, but it also bundles investors into a single industry prone to inventory cycles, supply-chain disruptions and shifting capital-expenditure plans.
Mechanics of daily leverage
Both ETFs reset leverage at the close of each trading session. The process maintains the three-to-one ratio but causes performance to compound along a path that can deviate significantly from the underlying index over longer periods, especially in volatile markets. The U.S. Securities and Exchange Commission notes these characteristics in its investor bulletin on leveraged ETFs, emphasizing their suitability chiefly for short-term strategies.
Key considerations for traders
• Cost vs. yield: TQQQ’s expense ratio is marginally higher, yet its dividend yield nearly triples that of SOXL.
• Concentration risk: SOXL’s semiconductor focus increases sensitivity to industry-specific news, while TQQQ spreads risk across technology, communication services and consumer cyclicals.
• Historical volatility: SOXL’s higher beta and deeper drawdowns imply greater potential for rapid gains and steep losses.
• Liquidity and scale: With almost $30 billion in assets, TQQQ generally offers tighter bid-ask spreads and higher daily volume than SOXL.
Because both instruments employ daily leverage, market participants frequently treat them as tactical vehicles rather than long-term holdings. Extended holding periods can yield outcomes that diverge from the simple arithmetic of triple returns, underscoring the importance of active monitoring.
Outlook within their respective markets
The semiconductor segment continues to be driven by cloud computing, artificial intelligence and automotive demand, factors that can boost SOXL during industry upswings. Conversely, TQQQ’s broader base captures earnings trends across megacap technology, streaming media and ecommerce, providing alternative drivers that may temper the impact of weakness in any single subgroup.
Ultimately, selection between the two ETFs hinges on an investor’s risk tolerance, sector conviction and time horizon. A trader seeking targeted exposure to chipmakers may favor SOXL’s intensive approach, while one pursuing leveraged participation in the wider Nasdaq-100 may opt for TQQQ’s diversified basket.
Crédito da imagem: The Motley Fool
