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Should You Invest in the First Trust NASDAQ-100-Technology Sector ETF (QTEC)?
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Designed to provide broad exposure to the Technology - Broad segment of the equity market, the First Trust NASDAQ-100-Technology Sector ETF (QTEC - Free Report) is a passively managed exchange traded fund launched on 04/19/2006.
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.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $3.51 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Broad segment of the equity market. QTEC seeks to match the performance of the NASDAQ-100 Technology Sector Index before fees and expenses.
The NASDAQ-100 Technology Sector Index is an equal-weighted index based on the securities of the NASDAQ-100 Index that are classified as technology.
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 0.57%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.14%.
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 in the Information Technology sector--about 91.50% of the portfolio.
Looking at individual holdings, Crowdstrike Holdings, Inc. (class A) (CRWD - Free Report) accounts for about 3.58% of total assets, followed by Pdd Holdings Inc. (adr) (PDD - Free Report) and Zscaler, Inc. (ZS - Free Report) .
The top 10 holdings account for about 31.25% of total assets under management.
Performance and Risk
Year-to-date, the First Trust NASDAQ-100-Technology Sector ETF has lost about -1.11% so far, and it's up approximately 53.47% over the last 12 months (as of 01/18/2024). QTEC has traded between $109.88 and $176.94 in this past 52-week period.
The ETF has a beta of 1.20 and standard deviation of 30.96% for the trailing three-year period, making it a high risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ-100-Technology Sector ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, QTEC is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $58.25 billion in assets, Vanguard Information Technology ETF has $58.73 billion. XLK has an expense ratio of 0.10% and VGT charges 0.10%.
Bottom Line
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 You Invest in the First Trust NASDAQ-100-Technology Sector ETF (QTEC)?
Designed to provide broad exposure to the Technology - Broad segment of the equity market, the First Trust NASDAQ-100-Technology Sector ETF (QTEC - Free Report) is a passively managed exchange traded fund launched on 04/19/2006.
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.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $3.51 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Broad segment of the equity market. QTEC seeks to match the performance of the NASDAQ-100 Technology Sector Index before fees and expenses.
The NASDAQ-100 Technology Sector Index is an equal-weighted index based on the securities of the NASDAQ-100 Index that are classified as technology.
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 0.57%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.14%.
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 in the Information Technology sector--about 91.50% of the portfolio.
Looking at individual holdings, Crowdstrike Holdings, Inc. (class A) (CRWD - Free Report) accounts for about 3.58% of total assets, followed by Pdd Holdings Inc. (adr) (PDD - Free Report) and Zscaler, Inc. (ZS - Free Report) .
The top 10 holdings account for about 31.25% of total assets under management.
Performance and Risk
Year-to-date, the First Trust NASDAQ-100-Technology Sector ETF has lost about -1.11% so far, and it's up approximately 53.47% over the last 12 months (as of 01/18/2024). QTEC has traded between $109.88 and $176.94 in this past 52-week period.
The ETF has a beta of 1.20 and standard deviation of 30.96% for the trailing three-year period, making it a high risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ-100-Technology Sector ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, QTEC is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $58.25 billion in assets, Vanguard Information Technology ETF has $58.73 billion. XLK has an expense ratio of 0.10% and VGT charges 0.10%.
Bottom Line
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.