The Beginner's Guide to US ETFs
QQQ vs. SPY vs. TQQQ, Fully Compared — Plus 3 Model Portfolios

① Introduction — Why Start With These Three

Look at the top holdings in most Korean retail investors' U.S. brokerage accounts and you'll almost certainly find QQQ, SPY, or TQQQ. All three get lumped into the same "big U.S. tech" category, but they're fundamentally different products. SPY is the broadest, safest basket that owns the entire U.S. economy. QQQ is a concentrated basket of growth stocks. TQQQ is a derivative that amplifies QQQ's daily moves by 3x. Treat them as interchangeable "American stocks" and you'll be blindsided in a year like 2022, when QQQ fell -33% while TQQQ collapsed -79% — two wildly different outcomes from what looks like the same bet.

This guide breaks down all three ETFs — fees, holdings, historical returns, drawdowns — covers lower-cost alternatives and taxes, and closes with three example portfolios you can actually use as a reference.

You might reasonably ask, "why not just pick individual stocks myself?" Why most investors start with ETFs, and how the risk structure of a single stock differs fundamentally from an ETF's, is covered with real semiconductor-stock data in our individual stocks vs. ETFs decision guide.

② SPY — The Original, the Broadest Basket

SPY (SPDR S&P 500 ETF Trust), launched in January 1993, was the first ETF in the United States. It tracks the S&P 500 index directly, spreading investment across 503 holdings — from mega-cap tech names like Apple, Microsoft, and Nvidia to banks, healthcare, energy, and consumer staples. Its top 10 holdings account for roughly 39% of the fund, the most diversified of the three.

Since its 1993 launch, SPY has returned +2,964% total, a CAGR of +10.76%/year. Trailing averages have stayed in double digits across timeframes: +13.16% over 5 years, +14.87% over 10 years, +11.25% over 20 years. Its dividend yield of roughly 1.03% is the highest of the three, paid quarterly. The expense ratio is 0.09%, cheaper than QQQ. During the 2022 inflation-driven bear market, SPY fell roughly 25–27% from its peak — smaller than QQQ's 33–37% decline, showing how broad diversification cushions the fall.

③ QQQ — A Basket of Nasdaq-100 Growth Stocks

QQQ (Invesco QQQ Trust) tracks the Nasdaq-100, concentrating in 100 of the largest non-financial companies listed on the Nasdaq. Nvidia (~8.9%), Apple (~7.2%), Microsoft (~5.0%), and Amazon (~4.9%) lead the pack, with the top 10 holdings making up 47.3% of the fund — far more concentrated than SPY.

As of March 2026, QQQ has outperformed the S&P 500 (SPY) in 7 of the last 10 years. In the first half of 2026, its total return of +18.96% topped SPY. Its dividend yield is a lower 0.43%, and its expense ratio of 0.20% (recently trimmed to 0.18%) runs somewhat higher than SPY's. But the same concentration that drives outperformance in bull markets amplifies losses in downturns — QQQ fell roughly 33–37% from its peak in 2022, and its all-time maximum drawdown has reached -82.97%.

④ TQQQ — The Two Faces of 3x Leverage

TQQQ (ProShares UltraPro QQQ) is a leveraged ETF designed to deliver 3x the Nasdaq-100's daily return. If QQQ rises 1% in a day, TQQQ should theoretically rise 3%. The catch is in that word "daily." TQQQ resets its swap exposure every night to restore the 3x multiplier for the next trading day — and that nightly reset is where losses structurally accumulate. This is "volatility decay," and it isn't a fee line item; it's baked into how the product works.

A real example makes it concrete. From December 31, 2025 to June 23, 2026, QQQ rose +16.17%. A perfect 3x tracker would have delivered roughly +48%. TQQQ actually returned +41.43% — even in a rising market, decay ate roughly 7 percentage points. The asymmetry is starker on the downside. On June 8, 2026, weak AI guidance from Broadcom combined with a hotter-than-expected jobs report to send QQQ down -4.8%; TQQQ plunged -14.28%. Recovering from a 14% loss requires roughly a 17% gain — the deeper the hole, the harder the math gets.

Swinging from -79% to +198% within a single year captures TQQQ's essence. This structure means TQQQ was built as a short-term, conviction-driven trading tool — fundamentally unsuited to buy-and-hold. Held long enough, its down-cycle losses eat into up-cycle gains in a way that compounds against you.

⑤ Head-to-Head Comparison

⑥ Lower-Cost Alternatives — Same Index, Cheaper Fee

SPY has the deepest liquidity and options market of the three, but for pure long-term holding, cheaper alternatives track the identical index. VOO (Vanguard, 0.03%) and SPLG (State Street, 0.02%) both track the S&P 500 at less than a third of SPY's fee. For Nasdaq-100 exposure, QQQM (Invesco, 0.15%) tracks the same index as QQQ at a lower cost. If you trade infrequently and are simply dollar-cost averaging for the long run, VOO/SPLG/QQQM will compound the fee savings in your favor over time.

⑦ Tax Guide for Korean Retail Investors

An ISA account offers a meaningful tax advantage for U.S. ETF investors. A standard overseas brokerage account taxes gains above the ₩2.5M deduction at the full 22% rate, while an ISA shelters up to ₩2M tax-free and taxes anything beyond that at just 9.9%.

⑧ Three Model Portfolios Built to Beat the Market

The portfolios below are illustrative examples meant to build intuition — not a recommendation to copy specific tickers or weights. Adjust for your own risk tolerance, capital, and time horizon.

⑨ Practical Checklist

• Define your purpose first: Long-term stability (e.g., retirement) favors a VOO/SPLG core; a growth tilt calls for more QQQ.
• Compare fees: For the same index exposure, VOO/SPLG/QQQM beat SPY/QQQ over the long run purely on cost.
• Keep TQQQ in a separate account: Isolating it from core holdings makes it far easier to actually follow your rebalancing rules.
• Model the taxes in advance: Using an ISA account or not can meaningfully change your after-tax return.
• Stress-test against a 2022 repeat: Ask yourself honestly whether you could hold through a -30% to -40% portfolio drawdown before you build it.

⑩ Conclusion — Know Your Purpose Before You Pick a Basket

SPY, QQQ, and TQQQ all fall under the umbrella of "U.S. stocks," but they're three fundamentally different tools with different risk levels, diversification, and design purposes. SPY is a broad, stable basket; QQQ concentrates on growth; TQQQ is a short-term amplifier for high-conviction directional bets. A common mistake among Korean retail investors is to line these three up and simply "buy whichever has the higher return." In reality, the right approach starts with your time horizon and how much of a -30% to -80% drawdown you can actually stomach — then size your allocation accordingly.

※ This article is for informational purposes only and does not constitute investment advice. The example portfolios are general, educational illustrations, not personalized investment recommendations. All investment decisions are the sole responsibility of the investor.