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Should First Trust NASDAQ100 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 NASDAQ100 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 $1.30 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
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.
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. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
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 0.24%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 42.80% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Moderna, Inc. (MRNA - Free Report) accounts for about 1.80% of total assets, followed by Atlassian Corporation Plc (class A) (TEAM - Free Report) and Advanced Micro Devices, Inc. (AMD - Free Report) .
The top 10 holdings account for about 12.44% 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 11.96% so far this year and is up roughly 29.10% in the last one year (as of 10/01/2021). In the past 52-week period, it has traded between $84.64 and $117.63.
The ETF has a beta of 1.03 and standard deviation of 24.71% for the trailing three-year period, making it a medium risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust NASDAQ100 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 $81.52 billion in assets, Invesco QQQ has $182.70 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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 NASDAQ100 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 NASDAQ100 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 $1.30 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
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.
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. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
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 0.24%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 42.80% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Moderna, Inc. (MRNA - Free Report) accounts for about 1.80% of total assets, followed by Atlassian Corporation Plc (class A) (TEAM - Free Report) and Advanced Micro Devices, Inc. (AMD - Free Report) .
The top 10 holdings account for about 12.44% 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 11.96% so far this year and is up roughly 29.10% in the last one year (as of 10/01/2021). In the past 52-week period, it has traded between $84.64 and $117.63.
The ETF has a beta of 1.03 and standard deviation of 24.71% for the trailing three-year period, making it a medium risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust NASDAQ100 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 $81.52 billion in assets, Invesco QQQ has $182.70 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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.