For investors seeking momentum, ProShares UltraPro QQQ (TQQQ - Free Report) is probably on the radar now. The fund just hit a 52-week high and is up about 122.9% from its 52-week low of $82.43/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
TQQQ in Focus
This ETF offers triple-leverage exposure to the daily performance of the NASDAQ-100 Index. The index is heavy on Information Technology (61.1%), Consumer Discretionary (20.8%) and Health Care (10.2%). The fund charges investors 95 basis points a year in fees (see: all Leveraged Equity ETFs here).
Why the Move?
The Nasdaq has been an area to watch lately given the upbeat sentiment prevailing around Wall Street, courtesy of the one-and-a-half-year high job additions in February.
Bond yields have been rising as prospects of higher interest rates this year started being baked in at the current level.
Since Nasdaq-100 is heavy on cyclical sectors like Technology and Consumer Discretionary, which perform well in a rising rate environment, gains in TQQQ are self-explanatory.
More Gains Ahead?
It seems that this fund might stay strong given a positive weighted alpha of 115.63. There is still some promise for investors who want to gain from this surging ETF.
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