r/letfs
FNGU is massively underperforming this year
Author discusses FNGU's underperformance and compares aggressive LETFs like BULZ, TECL, TQQQ, and SOXL for future allocation.
- Aggressive LETFs like SOXL offer high upside potential as semiconductors continue to surge.
- Diversified LETFs like TQQQ provide broader tech exposure beyond just semiconductors.
- Past performance of concentrated LETFs like FNGU does not guarantee future returns.
- Alternative LETFs like BULZ carry massive drawdown risks due to suspicious index methodologies.
FNGU, despite outperforming TQQQ in the past thanks to its concentrated bets, returns 11.65% YTD, which is honestly very impressive for a beta>3 tech-centric LETF. Turns out designing an index to pick the companies that worked well in the past doesn't guarantee future returns.
Now it seems that most FNGU people have moved to BULZ, which is doing well right now, but also has a very suspicious index methodology and 80% max drawdown in the mild 2022 bear market.
So, for those who sought using more aggressive index LETFs, what is your conviction now?
BULZ, because 8 fixed components + 7 top traded names, which sometimes includes MSTR, will reliably outperform.
TECL, which is informational technology sector, basically semiconductors and software, and for a while had 20% MSFT and 20% AAPL.
TQQQ, which had miraculous past performance, and including TSLA, SPCX and Pepsi gives it more diversification than TECL.
SOXL, because semiconductor will continue to moon and volatility is your best friend.
or something else?
Last year Feb 2025.
The size premium is known to be small or nonexistent (at least in recent research) but that doesn't mean small cap value doesn't work because all the factors look stronger in small caps.
I got so lucky with FNGU. Had a 300%+ ROI in just over a year (2024-2025) and then cashed out because I wanted to deleverage to 2X as DOTUS returned to power.
With that cash I started DCA buys of FNGO (2X) but it was clearly not doing well. I managed to bail out just in time to avert a loss.
I don't think I'll go back to these FNG\* tickers. I think I'll stick with TECL for near-term 3X plays.
well its still a good trade, I bought it for $15 and sold for $30 just within the last few months!
Small cap is a great Hedge, short to these hi flying LETFs.
Looks like PLTR is in the NYSE FANG+ this quarter too, and hasn't matched its past performance.
Micron (MU) is included now too but it hasn't been enough to hoist the laggards.
Yea, I had FNGU on the run in early May and sold it to move into TQQQ and QLD. FNGU is too concentrated at the top and the stocks between 50-100B has ran up much harder than the top ones.
FNGU should held short term not held long term compared to the broader wide SSO, UPRO, TQQQ or QLD
What do you mean? Small cap value outperformed the market massively during the lost decade 2000-2010
Read the article.
low performance begets high performance.
such is mean reversion
Is there any way to get the performance of fngu before it was removed and put back on the exchange? I can't remember if it 10x or 20x ?
FNGUSIM
Personally, I haven't done extensive research into SCV as I don't tilt my portfolio in that direction so perhaps I shouldn't have mentioned that. I was under the assumption that it was quite well supported in the data.
I think it used to be, but private equity has more or less eaten its lunch. Y Combinator et al fund the startups that now don't need to IPO for funding.
But SCV also has historically had periods of 20 yr underperformance punctuated with 5 yrs outperformance that blow LCB out of the water for the total. So hey, what do I know? Maybe SCV is about to hit another 2000-2003 period of outperformance.
the evidence for small-cap premium alone is not strong, which is what that article is saying. but that's not the reason most people own SCV.
the motivation of SCV is that it gives more exposure to the value premium per dollar invested. if you run a factor regression, SCV funds tend to have higher HML loading than LCV.