Investors aiming to capitalize on the rapid growth of technology stocks frequently encounter leveraged ETFs as potential instruments for enhanced returns. Among these, the ProShares Ultra QQQ ETF (ticker: QLD) and the Direxion Daily Semiconductor Bull 3X Shares (ticker: SOXL) stand out as two prominent funds designed to deliver multiple times the daily performance of their respective underlying indices.
While both offer magnified exposure to high-growth tech sectors, their methodologies vary considerably. QLD provides a 2x daily leveraged return of the Nasdaq-100 Index, encompassing a broad spectrum of technology and communication stocks along with consumer cyclicals. In contrast, SOXL seeks triple the daily return of the NYSE Semiconductor Index, concentrating exclusively on semiconductor companies.
Expense Ratio, Yield, and Assets Under Management
From a cost perspective, SOXL holds a slight advantage with an expense ratio of 0.75%, lower than QLD's 0.95%. Investors also receive a dividend yield of 0.53% with SOXL, which is significantly higher compared to QLD's 0.18%. However, given the leveraged structure of these funds and their typical use as short-term trading vehicles, dividends and fees may hold less weight in the decision-making process.
Looking at scale, SOXL manages approximately $13.6 billion in assets, while QLD oversees $10.6 billion. The difference in asset size reflects varied investor demand and confidence in each strategy.
Performance Over the Past Year
Examining recent returns, SOXL has demonstrated impressive performance, delivering a 44.62% total return over the year ending December 27, 2025. QLD experienced a more modest, yet still substantial, 24.95% return in the same timeframe. This gap underscores the higher potential gains associated with SOXL's 3x leverage on the semiconductor sector, which has been particularly lucrative in recent years.
Risk Profile and Volatility
Both funds inherently carry elevated volatility due to their leveraged nature. Beta values, measuring sensitivity to market movements relative to the S&P 500, stand at 5.32 for SOXL and 2.42 for QLD, illustrating SOXL's greater price fluctuations. Furthermore, the maximum drawdown over five years—a metric indicating the largest peak-to-trough decline—was substantially steeper for SOXL at -90.46%, compared to QLD's -63.68%.
Portfolio Composition and Sector Exposure
SOXL's holdings are exclusively concentrated within the semiconductor industry, with a portfolio of roughly 40 individual stocks. Leading positions include industry giants such as Broadcom, Nvidia, and Advanced Micro Devices. This sector focus lends significant growth opportunity but comes with heightened sector-specific risk.
Conversely, QLD offers investors exposure to a wider range of sectors within the technology-driven Nasdaq-100 Index. Approximately 55% of its assets are allocated to technology companies, 15% to communication services, and 13% to consumer cyclical stocks. Its largest holdings feature heavyweight corporations like Nvidia, Apple, and Microsoft. This diversification potentially reduces sector-specific volatility and may provide more balanced exposure to the broader tech ecosystem.
Daily Leverage Reset and Its Implications
Both SOXL and QLD employ a daily leverage reset mechanism which recalibrates their exposure each day to maintain their targeted multiple of daily index returns. While this can amplify gains during trending markets, it also introduces compounding effects that may cause returns over longer periods to deviate from the expected multiples, particularly during volatile or sideways markets. Investors should be cognizant that leveraged ETFs typically perform best when held for short durations.
Investor Considerations and Suitability
When deciding between these two leveraged ETFs, an investor's risk tolerance and market outlook are paramount. SOXL offers the opportunity for magnified gains by targeting three times the daily returns of the semiconductor sector, making it potentially more rewarding but also more volatile and thus suited to aggressive traders who can tolerate sharp price swings.
QLD, with its 2x leverage and broader sector coverage, provides a less volatile alternative within the leveraged ETF space. It may appeal to investors seeking enhanced tech exposure while moderating risk levels relative to SOXL.
Both funds are designed primarily for short-term trading rather than long-term buy-and-hold strategies, due to the effects of daily leverage resetting and market volatility.
Summary
In summary, SOXL and QLD represent two distinct approaches to leveraged investing in the technology sector. SOXL emphasizes concentrated exposure to the semiconductor industry with triple leverage, offering higher potential returns and increased risk. QLD provides double leverage across a diversified set of technology and related sectors, presenting more moderate growth prospects and risk.
Investors considering these ETFs should carefully evaluate their individual risk profiles, investment horizons, and market conditions before committing capital. Understanding the unique features and inherent volatility of leveraged ETFs is essential for making informed investment decisions in this segment.