As the Nasdaq Hits Records, Up the Leverage with 'QLD'

That bodes especially well for the Nasdaq-100, a benchmark of the top 100 non-financial companies weighted by market capitalization. These stocks are responsible for an estimated 90% of the movement that the greater Nasdaq Composite experiences. 

Inside the Nasdaq 100 are such growth-oriented large caps as Apple (AAPL), Alphabet (GOOGL), Intel (INTC), Facebook (FB), Microsoft (MSFT), and others. 

As of 3/31, it had a 48.21% holding in the Information Technology sector, a 19.19% holding in the Communication Services arena, and an 18.27% holding in Consumer Discretionary. 

The index has outperformed the S&P 500 Index for 11 of the past 13 years. In 2020, it ended the year with a combined market cap of $15 trillion. 

For investors seeking to capitalize on the Nasdaq-100’s rise, the ProShares Ultra QQQ (QLD A) offers a leveraged take on the popular index.

The fund captures twice the daily return of the underlying Nasdaq-100 index before fees and taxes. The exposure resets daily, and as such, does not provide a simple 2x multiplier on the return of the underlying index. 

As such, QLD should be monitored at least daily by investors.

As a leveraged fund, QLD carries greater risks than non-leveraged benchmarked funds.

If the fund is held over a period of time longer than a single day, and the underlying Nasdaq-100 index remains trendless, oscillating without establishing a clear upward or downward trend, QLD can lose money.

However, in times of a clear upward trend, QLD, has the potential to outperform the index due to compounding.

QLD carries an expense ratio of 0.95%, with a contractual waiver that ends on 9/30/21. 

For more news, information, and strategy, visit the Nasdaq Portfolio Solutions Channel.