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Should First Trust NASDAQ-100 Equal Weighted ETF (QQEW) Be on Your Investing Radar?
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If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the First Trust NASDAQ-100 Equal Weighted ETF (QQEW - Free Report) , a passively managed exchange traded fund launched on 04/19/2006.
The fund is sponsored by First Trust Advisors. It has amassed assets over $2.01 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 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. 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 0.57%.
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 36.50% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Regeneron Pharmaceuticals, Inc. (REGN - Free Report) accounts for about 1.08% of total assets, followed by Intuitive Surgical, Inc. (ISRG - Free Report) and Lucid Group, Inc. (class A) (LCID - Free Report) .
The top 10 holdings account for about 10.6% 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 return is roughly 25.13% so far this year and it's up approximately 19.43% in the last one year (as of 07/26/2023). In the past 52-week period, it has traded between $81.64 and $111.56.
The ETF has a beta of 1.05 and standard deviation of 22.70% 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 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 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 $94.85 billion in assets, Invesco QQQ has $210.62 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?
If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the First Trust NASDAQ-100 Equal Weighted ETF (QQEW - Free Report) , a passively managed exchange traded fund launched on 04/19/2006.
The fund is sponsored by First Trust Advisors. It has amassed assets over $2.01 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 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. 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 0.57%.
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 36.50% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Regeneron Pharmaceuticals, Inc. (REGN - Free Report) accounts for about 1.08% of total assets, followed by Intuitive Surgical, Inc. (ISRG - Free Report) and Lucid Group, Inc. (class A) (LCID - Free Report) .
The top 10 holdings account for about 10.6% 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 return is roughly 25.13% so far this year and it's up approximately 19.43% in the last one year (as of 07/26/2023). In the past 52-week period, it has traded between $81.64 and $111.56.
The ETF has a beta of 1.05 and standard deviation of 22.70% 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 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 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 $94.85 billion in assets, Invesco QQQ has $210.62 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.