What is the  SPQQ ETF ?
5 min read
By Beqa Bumbeishvili, ETF Insider

What is the SPQQ ETF ?

In the world of finance, Exchange-Traded Funds (ETFs) have gained immense popularity as a preferred investment option. One such ETF, the SPQQ ETF, has piqued the interest of investors. In this article, we will delve into the intricacies of the SPQQ ETF, exploring its underlying assets, benefits, and considerations before investing.

SPQQ ETF: Overview

The SPQQ ETF, also known as the S&P 500 Equal Weight Communication Services, Consumer Discretionary, and Information Technology ETF, is designed to track the performance of a specific index. This index comprises two universes of stocks: Universe One consists of the 500 largest U.S. companies by market capitalization, including real estate investment trusts (REITs), listed on U.S. exchanges. Universe Two consists of the 100 largest U.S. and non-U.S. companies by market capitalization, excluding financial companies, listed on the NASDAQ Global Select Market or NASDAQ Global Market. The index then selects the 30 largest companies from each Universe by market capitalization and weights each company equally.

SPQQ ETF: Underlying and Exposure: What does it track and how?

As of the date of this prospectus, the SPQQ ETF has significant exposure to the Communication Services, Consumer Discretionary, and Technology sectors, in accordance with the Bloomberg Industry Classification Standard. It is important to note that the sectors in which the ETF's components are focused may change over time as the index composition evolves. Additionally, the SPQQ ETF is classified as non-diversified under the Investment Company Act of 1940, allowing it to invest a relatively high percentage of its assets in a limited number of issuers.
Under normal circumstances, the SPQQ ETF aims to replicate the index by investing in all of the securities in the index, proportionate to their weightings. However, certain circumstances may prompt the ETF to invest in a representative sample of the index instead, such as when replicating the entire index becomes impractical or disadvantageous.

SPQQ overlap What is the  SPQQ ETF ?SPQQ overlap What is the SPQQ ETF ?

SPQQ ETF: Benefits to Invest in this ETF

The SPQQ ETF offers several benefits to investors. Its equal-weighted approach ensures that each company in the index receives the same weight, reducing the impact of larger companies on the overall performance. This approach potentially provides greater exposure to smaller companies with growth potential. Additionally, the ETF provides exposure to the Communication Services, Consumer Discretionary, and Technology sectors, which are often considered high-growth sectors with significant potential for long-term returns.

SPQQ ETF: Considerations Before Investing

Before considering an investment in the SPQQ ETF, investors should carefully assess their risk tolerance and investment objectives. It is essential to recognize that the ETF's focus on specific sectors may result in increased volatility and potential concentrated risks. Furthermore, as with any investment, past performance is not indicative of future results, and investors should conduct thorough research and consider consulting with a financial advisor to make informed decisions.


The SPQQ ETF presents investors with an opportunity to gain exposure to prominent sectors in the market through a unique equal-weighted approach. By tracking the performance of the carefully constructed index, the ETF aims to provide investors with attractive returns. However, investors must exercise caution, conducting due diligence and understanding their risk appetite before making investment decisions.

Disclaimer: This article is for informational purposes only and does not provide investment advisory services. Investors should conduct independent research and seek professional advice before making any investment decisions.

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  • What is the SPQQ ETF?

    The SPQQ ETF, also known as the ProShares UltraPro Short QQQ, is an exchange-traded fund that aims to provide investors with three times the inverse (opposite) daily performance of the Nasdaq-100 Index.

  • What is the underlying index that the SPQQ ETF aims to track?

    The SPQQ ETF seeks to track the Nasdaq-100 Index, which includes 100 of the largest non-financial companies listed on the Nasdaq Stock Market, primarily in the technology sector.

  • How does the SPQQ ETF work?

    The SPQQ ETF uses financial instruments, such as swap agreements, futures contracts, and short positions, to achieve its goal of providing three times the opposite daily performance of the Nasdaq-100 Index. It aims to achieve this leverage on a daily basis, which means its performance may differ over longer periods.

  • What are the advantages of investing in the SPQQ ETF?

    Investing in the SPQQ ETF can offer potential profits when the Nasdaq-100 Index declines in value on a daily basis. It provides a way for investors to hedge against potential losses in the technology sector or the broader market.

  • What are the risks associated with the SPQQ ETF?

    The SPQQ ETF is a leveraged product, and its performance is magnified compared to the inverse movement of the Nasdaq-100 Index. As a result, it is more sensitive to market volatility, and losses can be amplified. It is essential for investors to understand the risks and consider their risk tolerance before investing.