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Should Fidelity Nasdaq Composite Index ETF (ONEQ) Be on Your Investing Radar?
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Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Fidelity Nasdaq Composite Index ETF (ONEQ - Free Report) is a passively managed exchange traded fund launched on 09/25/2003.
The fund is sponsored by Fidelity. It has amassed assets over $4.85 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
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 0.82%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 47% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 13.34% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Amazon.com Inc (AMZN - Free Report) .
The top 10 holdings account for about 54.01% 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 added roughly 28.66% so far this year and is up about 25.15% in the last one year (as of 10/19/2023). In the past 52-week period, it has traded between $40.02 and $56.43.
The ETF has a beta of 1.12 and standard deviation of 23.22% for the trailing three-year period, making it a medium risk choice in the space. With about 1200 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity Nasdaq Composite Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, ONEQ is an outstanding option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $90.59 billion in assets, Invesco QQQ has $202.94 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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?
Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Fidelity Nasdaq Composite Index ETF (ONEQ - Free Report) is a passively managed exchange traded fund launched on 09/25/2003.
The fund is sponsored by Fidelity. It has amassed assets over $4.85 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
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 0.82%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 47% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 13.34% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Amazon.com Inc (AMZN - Free Report) .
The top 10 holdings account for about 54.01% 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 added roughly 28.66% so far this year and is up about 25.15% in the last one year (as of 10/19/2023). In the past 52-week period, it has traded between $40.02 and $56.43.
The ETF has a beta of 1.12 and standard deviation of 23.22% for the trailing three-year period, making it a medium risk choice in the space. With about 1200 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity Nasdaq Composite Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, ONEQ is an outstanding option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $90.59 billion in assets, Invesco QQQ has $202.94 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.