QLD DCA Backtest
If you'd invested $700 every month, how long to $1M?
QLD (ProShares Ultra QQQ) is a leveraged ETF built to track twice (2x) the *daily* return of the Nasdaq-100. It launched in 2006, so it has a long track record and shows up often in dollar-cost-averaging backtests. Think of it as riding the Nasdaq-100 — an index packed with big tech names like Apple, Microsoft, and Nvidia — at 2x on a day-by-day basis, using borrowed money to amplify the move.
Investing since Oct 2013, that's about $1.02M today · invested $107.8K · annualized +32%
Try it with your own numbers →
First, what is the Nasdaq-100?
The Nasdaq-100 is an index of roughly 100 of the largest non-financial companies listed on the Nasdaq. Household tech names you use every day — Apple, Microsoft, Amazon, Nvidia, Google — make up a big chunk of it. That means it can climb fast when growth is strong, but it also tends to fall hard when tech stocks wobble all at once.
QLD doesn't buy the index itself — it magnifies the index's *daily* move by 2x. If the index rises 1% on a given day, QLD rises about 2%; if it falls 1%, QLD falls about 2%. It's reset to do exactly this every single day.
'2x daily' and daily rebalancing
The key word here is *daily*. After the market closes each day, QLD adjusts its borrowed exposure so that it's set to deliver 2x again the next day. This is called daily rebalancing.
Because of this, the return over a month or a year is NOT simply 2x the index's return over that same stretch. As the daily 2x resets stack up, the long-run result drifts away from simple multiplication. If you don't understand this, it's easy to expect something wrong — like 'the Nasdaq-100 doubled, so QLD must have quadrupled.'
Why long-term results aren't just '2x the index'
The reason is path dependence. Because it resets to 2x every day, a choppy up-then-down-then-up sequence can leave you with a loss even after the index returns to where it started. For example, if an asset rises +10% one day and falls −9.09% the next, it's back to breakeven — but a 2x product goes +20% then −18.18%, so 100 becomes about 98.2, short of where it began. These small losses piling up in a sideways market are called volatility drag (or leverage decay).
On the flip side, in a strong, steadily rising market that trends in one direction, the compounding of applying 2x to a growing balance each day can earn *more* than a plain 2x. So QLD is your friend when the trend is clear, and your enemy when things chop up and down or grind lower for a long time. That's why, even over the same period, the outcome swings hard depending on your start date and the *order* in which the ups and downs happened.
How it fits dollar-cost averaging — and the limits
Dollar-cost averaging — investing the same amount every month — buys more shares when the price is low, so it can pair surprisingly well with a high-volatility product like QLD across a big drop and the recovery that follows. The shares you accumulate cheaply during a downturn pack a punch when things bounce back.
But the limits are real. Even with the same contribution plan, *when* you start matters far more than it does for a 1x product. Start right before a big crash and you'll have to wait a long time to recover, and volatility drag eats into your returns the whole way. Keep in mind that 'luck of the start date' plays an outsized role here. A good past is no guarantee the future will look the same.
Who it's for — and who it isn't
QLD suits people who can stomach a big drawdown emotionally, understand how a leveraged product is built, and can set aside just a slice of their portfolio to ride out the swings over a long horizon. A common view is to treat it as a satellite holding — a small portion — rather than something you bet everything on.
It's a poor fit if losing principal keeps you up at night, if it's money you'll need soon, or if you tend to panic-sell on sharp drops. In that case, the unleveraged QQQ or the more diversified SPY may be an easier choice to live with. Either way, it's never too late to run your own numbers through the calculator above before deciding.
Want to change the amount, buy day, or goal? Use the button above to calculate it yourself.
Related reading
This content is for informational purposes and is not investment advice or a recommendation. You are solely responsible for your investment decisions.