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Investment Q&A

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Q: Can you please comment about ETFs that short the QQQ. I see that SQQQ has a market cap of $2.78B compared with $651M for PSQ; is SQQQ the best choice at 4x the size? SQQQ and PSQ apparently pay high dividends, is that really the case? Finally, with QQD's market cap of only $59M, is this ETF just too small to consider?
Thanks!

Asked by Grant on May 20, 2025

5i Research Answer:

SQQQ is a triple-leveraged ETF and really is designed for day-traders. The derivative reset decays asset value daily. It can certainly work if an investor is spot on with their market call, but we do not endorse leveraged ETFs as hedges. PSQ is single levered and we would consider better for such purposes. Both pay distributions on gains made and for taxes this can be a combination of return of capital, capital gains and income. PSQ has a five year annualized return of -17%. SQQQ is negative 54%. QQD is fairly small and we would be cautious on size, especially since it is so new we cannot gauge its performance in any way.

Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in QQQ.

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