SQQQ vs TZA

SQQQAProShares UltraPro Short QQQ

TZABDirexion Daily Small Cap Bear 3X ETF

In short

SQQQ The workhorse of the short-Nasdaq trade. Running since 2010, it aims at three times the inverse of the Nasdaq-100's daily move, resets every session, and charges 0.94% a year, below the going rate in the 3x bear category.

TZA Born in the wreckage of 2008, TZA aims to move three times the inverse of the Russell 2000's daily swing. A heavily traded way to press a bearish small-cap view, with a daily reset that makes it a tool for days, not quarters.

Stated mandate

SQQQ The fund seeks daily investment results, before fees and expenses, equal to three times the inverse of the Nasdaq-100 Index’s daily performance.

TZA The Fund seeks daily inverse leveraged investment results equal to negative three times the daily performance of the Russell 2000 Index. Its leverage makes it potentially riskier than nonleveraged alternatives.

Why people hold it

• SQQQ 0.94% a year with no waiver propping it up, and below what 3x bear peers charge: SDOW and SRTY each sit at 0.95% net of waivers through September 30, 2027.
• One of the most actively traded funds in its category, with a billion-dollar-plus asset base behind it. Depth is the reason traders reach for this one.
• ProShares has run this single-day mandate since February 2010, and it tracks its stated -3x daily target about as closely as anything in its peer group.proshares.com
• The mandate is blunt and public: three times the inverse of the Nasdaq-100's daily performance, before fees, measured NAV to NAV. No discretion, no stock picking.sec.gov

• TZA Fee of 0.99% comes in under the typical leveraged bear fund, and under every other Russell 2000 short ETF on the shelf (RWM, TWM, SRTY).
• Very actively traded, which usually means tight spreads and easy exits when a short-term view changes fast.
• Running since 2008, a long life for a leveraged fund, and it has stayed close to its stated daily target.
• Sits in the upper half of a crowded leveraged bear peer group on our overall read.

Worth knowing

• SQQQ Returns compound daily. Over any period longer than a single day, results will very likely differ from -3x the index, and the fund can lose money when the index is flat.sec.gov
• It holds swaps and futures on the index, not shorted stocks, so counterparty exposure and financing costs ride along with the price.sec.gov
• At 0.94%, the fee is heavy freight for a vehicle built around single-day results. Distributions, when declared, come quarterly.

• TZA The -3x target resets every day. Hold longer and compounding pulls results away from three times the index move over that stretch, up or down.
• Triple leverage cuts both ways: a 1% up day in the Russell 2000 is roughly a 3% down day here, before costs.
• Direxion's own filing flags the fund as potentially riskier than nonleveraged alternatives and built for daily monitoring.

Full SQQQ profile⁠

Full TZA profile⁠