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Should Fidelity Nasdaq Composite Index ETF (ONEQ) Be on Your Investing Radar?
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Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the Fidelity Nasdaq Composite Index ETF (ONEQ - Free Report) , a passively managed exchange traded fund launched on 09/25/2003.
The fund is sponsored by Fidelity. It has amassed assets over $4.32 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Additionally, growth stocks have a greater level of risk associated with them. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.21%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.90%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 45.40% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Common Stock (AAPL - Free Report) accounts for about 12.67% of total assets, followed by Common Stock (MSFT - Free Report) and Common Stock (AMZN - Free Report) .
The top 10 holdings account for about 47.38% of total assets under management.
Performance and Risk
ONEQ seeks to match the performance of the NASDAQ Composite Index before fees and expenses. The NASDAQ Composite TR USD is the market capitalization-weighted index of over 3,300 common equities listed on the Nasdaq stock exchange.
The ETF has gained about 15.99% so far this year and is down about -11.85% in the last one year (as of 04/10/2023). In the past 52-week period, it has traded between $40.02 and $53.22.
The ETF has a beta of 1.13 and standard deviation of 24.93% for the trailing three-year period, making it a medium risk choice in the space. With about 1016 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity Nasdaq Composite Index ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, ONEQ is a good option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $80.94 billion in assets, Invesco QQQ has $171.54 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should Fidelity Nasdaq Composite Index ETF (ONEQ) Be on Your Investing Radar?
Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the Fidelity Nasdaq Composite Index ETF (ONEQ - Free Report) , a passively managed exchange traded fund launched on 09/25/2003.
The fund is sponsored by Fidelity. It has amassed assets over $4.32 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Additionally, growth stocks have a greater level of risk associated with them. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.21%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.90%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 45.40% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Common Stock (AAPL - Free Report) accounts for about 12.67% of total assets, followed by Common Stock (MSFT - Free Report) and Common Stock (AMZN - Free Report) .
The top 10 holdings account for about 47.38% of total assets under management.
Performance and Risk
ONEQ seeks to match the performance of the NASDAQ Composite Index before fees and expenses. The NASDAQ Composite TR USD is the market capitalization-weighted index of over 3,300 common equities listed on the Nasdaq stock exchange.
The ETF has gained about 15.99% so far this year and is down about -11.85% in the last one year (as of 04/10/2023). In the past 52-week period, it has traded between $40.02 and $53.22.
The ETF has a beta of 1.13 and standard deviation of 24.93% for the trailing three-year period, making it a medium risk choice in the space. With about 1016 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity Nasdaq Composite Index ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, ONEQ is a good option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $80.94 billion in assets, Invesco QQQ has $171.54 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.