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Should First Trust NASDAQ-100 Equal Weighted ETF (QQEW) 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 First Trust NASDAQ-100 Equal Weighted ETF (QQEW - Free Report) is a passively managed exchange traded fund launched on 04/19/2006.
The fund is sponsored by First Trust Advisors. It has amassed assets over $2.02 billion, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that fall in the large cap category tend to 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.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Additionally, growth stocks have a greater level of risk associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
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 0.58%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.62%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 36.70% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Old Dominion Freight Line, Inc. (ODFL - Free Report) accounts for about 1.28% of total assets, followed by Pdd Holdings Inc. (adr) (PDD - Free Report) and Baker Hughes Company (class A) (BKR - Free Report) .
The top 10 holdings account for about 11.87% of total assets under management.
Performance and Risk
QQEW seeks to match the performance of the NASDAQ-100 Equal Weighted Index before fees and expenses. The NASDAQ-100 Equal Weighted Index is the equal-weighted version of the NASDAQ-100 Index which includes 100 of the largest non-financial securities listed on NASDAQ based on market capitalization.
The ETF has gained about 23.02% so far this year and it's up approximately 17.37% in the last one year (as of 11/28/2023). In the past 52-week period, it has traded between $86.94 and $112.15.
The ETF has a beta of 1.05 and standard deviation of 22.16% for the trailing three-year period, making it a medium risk choice in the space. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust NASDAQ-100 Equal Weighted 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, QQEW is an excellent 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 $98.84 billion in assets, Invesco QQQ has $222.49 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 First Trust NASDAQ-100 Equal Weighted ETF (QQEW) Be on Your Investing Radar?
Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the First Trust NASDAQ-100 Equal Weighted ETF (QQEW - Free Report) is a passively managed exchange traded fund launched on 04/19/2006.
The fund is sponsored by First Trust Advisors. It has amassed assets over $2.02 billion, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that fall in the large cap category tend to 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.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Additionally, growth stocks have a greater level of risk associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
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 0.58%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.62%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 36.70% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Old Dominion Freight Line, Inc. (ODFL - Free Report) accounts for about 1.28% of total assets, followed by Pdd Holdings Inc. (adr) (PDD - Free Report) and Baker Hughes Company (class A) (BKR - Free Report) .
The top 10 holdings account for about 11.87% of total assets under management.
Performance and Risk
QQEW seeks to match the performance of the NASDAQ-100 Equal Weighted Index before fees and expenses. The NASDAQ-100 Equal Weighted Index is the equal-weighted version of the NASDAQ-100 Index which includes 100 of the largest non-financial securities listed on NASDAQ based on market capitalization.
The ETF has gained about 23.02% so far this year and it's up approximately 17.37% in the last one year (as of 11/28/2023). In the past 52-week period, it has traded between $86.94 and $112.15.
The ETF has a beta of 1.05 and standard deviation of 22.16% for the trailing three-year period, making it a medium risk choice in the space. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust NASDAQ-100 Equal Weighted 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, QQEW is an excellent 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 $98.84 billion in assets, Invesco QQQ has $222.49 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.