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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 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 usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
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. Also, growth stocks are a type of equity that carries more risk compared to others. 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
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 0.43%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 41.80% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Splunk Inc. accounts for about 1.04% of total assets, followed by Advanced Micro Devices, Inc. (AMD - Free Report) and Csx Corporation (CSX - Free Report) .
The top 10 holdings account for about 10.14% 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 lost about -24.36% so far this year and is down about -15.37% in the last one year (as of 05/10/2022). In the past 52-week period, it has traded between $89.30 and $120.91.
The ETF has a beta of 1.05 and standard deviation of 25.56% 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 carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, QQEW is a sufficient 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 $68.04 billion in assets, Invesco QQQ has $162.07 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 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 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 usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
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. Also, growth stocks are a type of equity that carries more risk compared to others. 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
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 0.43%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 41.80% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Splunk Inc. accounts for about 1.04% of total assets, followed by Advanced Micro Devices, Inc. (AMD - Free Report) and Csx Corporation (CSX - Free Report) .
The top 10 holdings account for about 10.14% 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 lost about -24.36% so far this year and is down about -15.37% in the last one year (as of 05/10/2022). In the past 52-week period, it has traded between $89.30 and $120.91.
The ETF has a beta of 1.05 and standard deviation of 25.56% 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 carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, QQEW is a sufficient 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 $68.04 billion in assets, Invesco QQQ has $162.07 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.