TQQQ Outpaces SSO in Market Rally, Emerges as Top Choice for Aggressive Investors

TQQQ has outperformed SSO over the past 12 months, posting a return of 168%, while SSO delivered 112% gains. This divergence reflects the disproportionate momentum in technology and growth sectors, which are heavily weighted in the Nasdaq-100 index. TQQQ, designed to deliver three times the daily performance of the Nasdaq-100, has capitalized on strong rallies in mega-cap tech stocks such as Apple, Microsoft, and Nvidia, which now represent over 45% of the index’s weight. The performance gap underscores the heightened volatility and concentration risk in leveraged ETFs, particularly those tracking narrow indices. Despite higher expense ratios—0.95% for TQQQ versus 0.90% for SSO—TQQQ’s aggressive exposure to technology-driven growth has proven more profitable in the current bull market cycle. The S&P 500, while diversified across sectors including financials and industrials, has seen more moderate gains, especially in the absence of dominant leadership from the tech sector. Market participants tracking short- and medium-term momentum have increasingly shifted allocations toward TQQQ, with net inflows reaching $1.2 billion in the last quarter compared to $480 million for SSO. This investor behavior reflects a preference for capturing outsized gains in high-growth segments, even amid elevated risk. The trend is especially pronounced among retail traders and hedge funds using tactical positioning in volatile equity markets. However, the outperformance comes with caveats. Leveraged ETFs are designed for daily rebalancing and can experience significant tracking error over longer horizons due to volatility decay. Investors should monitor both daily and cumulative performance carefully, particularly as interest rate expectations and macroeconomic data evolve.