Choosing Between QLD and SSO: Which Leveraged ETF Wins?
By John Nada·Feb 7, 2026·5 min read
Investors must decide between QLD and SSO, two leveraged ETFs with distinct profiles and performance metrics. Understanding their differences is crucial for informed investment choices.
Investors face a crucial decision between the ProShares - Ultra QQQ ETF (QLD) and the ProShares - Ultra S&P 500 ETF (SSO), both of which aim to double the daily returns of major U.S. equity indexes. While SSO focuses on the S&P 500, tracking a broader market, QLD zeroes in on the tech-heavy Nasdaq-100. The trade-offs between these two funds include expenses, risk, recent performance, and portfolio composition.
According to Yahoo Finance, the expense ratio for SSO is 0.87%, slightly lower than QLD's 0.95%. This small difference in expense ratios might seem inconsequential at first glance, but for cost-conscious investors, it can accumulate over time, impacting overall returns. Both funds are issued by ProShares, a well-known provider of leveraged ETFs, which adds an element of credibility to their offerings.
In terms of performance, as of February 2, 2026, QLD outperformed SSO with a one-year return of 29.85% compared to SSO's 23.67%. This performance metric is crucial for investors looking for aggressive growth, as QLD's focus on the technology sector has historically led to higher returns during bullish market cycles. However, investors should also consider how performance figures can fluctuate, especially given the inherent volatility of leveraged ETFs.
Moreover, SSO offers a higher dividend yield of 0.68%, appealing to investors seeking income. The dividend yield is an important factor for many investors who want to generate passive income. It indicates that while QLD aims for aggressive capital appreciation, SSO provides a more balanced approach, blending growth with income through dividends. This characteristic could make SSO more appealing for those who are risk-averse or looking to diversify their income streams.
When examining long-term risk, the maximum drawdown for QLD stands at -63.68%, significantly higher than SSO’s -46.73%. A maximum drawdown quantifies the maximum observed loss from a peak to a trough, and a higher figure indicates greater risk. For those investors who may not have the stomach for significant downturns, this is a critical consideration. Despite this, if one had invested $1,000 in SSO, it would have grown to $2,601, whereas QLD would have grown to $2,403 over five years. While both show growth, SSO’s more considerable increase in value could indicate a steadier path, particularly during market corrections.
QLD's portfolio is heavily weighted in technology, with 53% allocated to that sector, while SSO has a more diversified approach, with only 35% in technology. This difference in allocation can significantly impact performance during different market conditions. For instance, during tech booms, QLD may outperform due to its concentrated investment in high-growth tech stocks. However, in downturns or corrections affecting the tech sector, QLD could suffer more than SSO, which benefits from its diversification across various sectors, including financial services and consumer cyclical stocks.
Additionally, QLD allocates 17% to communication services and 13% to consumer cyclical stocks, indicating a strategy that still seeks growth potential outside of technology. In contrast, SSO features a broader sector mix, with 13% in financial services and 11% in communication services. This diversified portfolio positions SSO to potentially weather economic downturns more effectively than QLD, making it a safer bet for more risk-averse investors.
Both funds reset their leverage daily, which can significantly impact performance, particularly in volatile markets. This daily reset can lead to a phenomenon known as compounding, which may result in returns that diverge from expected outcomes over longer periods. For example, in highly volatile markets, this compounding effect can magnify losses, particularly for QLD, which has a higher beta. As of the last evaluation, QLD’s beta over a five-year period was 2.35, whereas SSO's beta stood at 2.03. Beta measures price volatility relative to the S&P 500, indicating that QLD is more volatile and, therefore, carries a higher risk.
Investors need to recognize that leveraged ETFs, while potentially lucrative, come with heightened risks compared to standard ETFs. They are designed primarily for short-term strategies and are not typically suitable for long-term holdings due to their daily rebalancing structure. This characteristic can lead to unexpected results, especially in a fluctuating market environment where trends can shift rapidly.
For investors considering these leveraged ETFs, the key takeaway is that while both QLD and SSO aim to double returns, the choice hinges on individual risk tolerance and investment strategy. Tech enthusiasts might favor QLD for its aggressive growth potential, while those preferring stability might lean towards SSO's diversified approach. Understanding these nuances can guide investors in making an informed decision about their leveraged ETF investments.
Furthermore, it's essential for investors to consider their overall portfolio strategy when deciding between QLD and SSO. Those who already have significant exposure to technology stocks might find SSO’s diversified nature more appealing to balance their overall risk. Conversely, investors who are confident in the tech sector's future trajectory may prefer QLD as a means to capitalize on its growth potential.
In conclusion, both QLD and SSO offer unique advantages and disadvantages that cater to different types of investors. The decision between the two should not be taken lightly, as it may significantly influence overall portfolio performance and risk exposure. By carefully considering factors such as expense ratios, performance metrics, maximum drawdowns, and sector allocations, investors can make a more informed choice that aligns with their financial goals and investment strategies. As the market evolves and new data becomes available, ongoing evaluation of these funds will be crucial for maintaining an optimal investment portfolio.
For more guidance on ETF investing, check out the full guide at this link.