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The Zacks Analyst Blog Highlights: QQQ, ONEQ, QQEW, QQQE and TQQQ
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For Immediate Release
Chicago, IL – June 6, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include PowerShares QQQ ETF (QQQ - Free Report) , Fidelity Nasdaq Composite Index Tracking ETF (ONEQ - Free Report) , First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW - Free Report) , Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE - Free Report) and ProShares UltraPro QQQ (TQQQ - Free Report) .
This year, the Nasdaq Composite has been the best-performing among the top three U.S. indices with year-to-date returns of 8.6%, which trumped the Dow Jones’ flat return and the S&P 500’s 1.9% gains. Maintaining the winning trend, the tech-heavy Nasdaq index hit another record high of 7,606.46 on Jun 4, 2018.
FANGs Rebound to All-Time High on Compelling Valuation
FANGs suffered in March thanks to Facebook data breach reports and the consequent apprehensions over stricter regulations in the social media space. Nvidia’s announcement that it will suspend self-driving car tests on public roads, short-selling pressure on Twitter and insane valuation of Netflix also hit the tech space hard in March. The Nasdaq composite dived 6.9% in March from the month’s high of 7588.319824 hit on Mar 12. (read: 5 Reason Why FANG ETFs Lost Their Charm in March).
Now, putting all these worries into the back burner, the sector once again recoiled in full strength. FAANG members like Apple, Amazon and Netflix all hit new highs on Jun 4, cashing on compelling valuation. Other tech names touching all-time highs on Jun 4 were Microsoft, Electronic Arts and Adobe (read: Is the Rout in Tech ETFs Transitory?).
Cyclical Nature of the Sector
A pickup in the global economy is great for a cyclical sector like technology. Such sectors perform better in a rising rate environment that we are witnessing currently in the United States. The Nasdaq index also has considerable weight in another cyclical sector Consumer Discretionary. After all, with U.S. economic growth at a solid clip and job growth steady, it makes sense to ride out the amazing growth momentum (read: What Rising Rates? Play These Cyclical ETFs).
Trump Tax Reform
Investors should note that tech behemoths hoard huge cash overseas and are poised to benefit the most from Trump's repatriation tax policy. Also, investors expect higher dividend distribution or share buyback from this move, which is pushing tech stocks higher (read: How Will Tax Reform Affect Buyback and Dividend ETFs?).
Upbeat Earnings
The technology sector (98.4% companies have already reported) came up with an earnings beat ratio of 86.9% and revenue beat ratio of 90.2% in Q1. Tech earnings witnessed about 30.8% jump in the quarter on 13% higher revenues, per the Earnings Trends issued on May 31, 2018.
On the other hand, Consumer Discretionary (97.2% companies reported so far) logged 82.9% earnings beat ratio and a 68.6% revenue beat ratio. The sector’s earnings and revenue growth was 15.1% and 5.8%, respectively.
ETFs to Play
For investors interested in riding out this uptrend in Nasdaq, we suggest five ETFs that track this key American tech-heavy index.
PowerShares QQQ ETF
The underlying Nasdaq-100 Index includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization. The fund charges 20 bps in fees.
Fidelity Nasdaq Composite Index Tracking ETF
This fund follows the Nasdaq Composite Index. Cash takes the top spot with nearly 11.23% share of assets, followed by Apple (6.41%), Microsoft (5.76%) and Amazon (5.09%). It charges investors 21 bps in fees per year.
First Trust NASDAQ-100 Equal Weighted Index Fund
The fund looks to replicate the performance of the NASDAQ-100 Equal Weighted index. The fund appears heavily invested in the Technology sector with about 36% allocation, followed by about 24.2% in Consumer Services, 19.1% in Health Care and 10.6% in Industrials. The fund charges 60 bps in annual fees.
Direxion NASDAQ-100 Equal Weighted Index Shares
The underlying NASDAQ 100 Equal Weighted Index includes 100 of the largest non-financial securities listed on NASDAQ, but instead of being weighted by market capitalization, each of the constituents is initially set at 1.00%. The fund charges 35 bps in fees.
ProShares UltraPro QQQ
The fund offers triple leverage exposure to the NASDAQ-100 Index and charges 95 bps in fees.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: QQQ, ONEQ, QQEW, QQQE and TQQQ
For Immediate Release
Chicago, IL – June 6, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include PowerShares QQQ ETF (QQQ - Free Report) , Fidelity Nasdaq Composite Index Tracking ETF (ONEQ - Free Report) , First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW - Free Report) , Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE - Free Report) and ProShares UltraPro QQQ (TQQQ - Free Report) .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday’s Analyst Blog:
Nasdaq at All-Time Highs: Play These 5 ETFs
This year, the Nasdaq Composite has been the best-performing among the top three U.S. indices with year-to-date returns of 8.6%, which trumped the Dow Jones’ flat return and the S&P 500’s 1.9% gains. Maintaining the winning trend, the tech-heavy Nasdaq index hit another record high of 7,606.46 on Jun 4, 2018.
FANGs Rebound to All-Time High on Compelling Valuation
FANGs suffered in March thanks to Facebook data breach reports and the consequent apprehensions over stricter regulations in the social media space. Nvidia’s announcement that it will suspend self-driving car tests on public roads, short-selling pressure on Twitter and insane valuation of Netflix also hit the tech space hard in March. The Nasdaq composite dived 6.9% in March from the month’s high of 7588.319824 hit on Mar 12. (read: 5 Reason Why FANG ETFs Lost Their Charm in March).
Now, putting all these worries into the back burner, the sector once again recoiled in full strength. FAANG members like Apple, Amazon and Netflix all hit new highs on Jun 4, cashing on compelling valuation. Other tech names touching all-time highs on Jun 4 were Microsoft, Electronic Arts and Adobe (read: Is the Rout in Tech ETFs Transitory?).
Cyclical Nature of the Sector
A pickup in the global economy is great for a cyclical sector like technology. Such sectors perform better in a rising rate environment that we are witnessing currently in the United States. The Nasdaq index also has considerable weight in another cyclical sector Consumer Discretionary. After all, with U.S. economic growth at a solid clip and job growth steady, it makes sense to ride out the amazing growth momentum (read: What Rising Rates? Play These Cyclical ETFs).
Trump Tax Reform
Investors should note that tech behemoths hoard huge cash overseas and are poised to benefit the most from Trump's repatriation tax policy. Also, investors expect higher dividend distribution or share buyback from this move, which is pushing tech stocks higher (read: How Will Tax Reform Affect Buyback and Dividend ETFs?).
Upbeat Earnings
The technology sector (98.4% companies have already reported) came up with an earnings beat ratio of 86.9% and revenue beat ratio of 90.2% in Q1. Tech earnings witnessed about 30.8% jump in the quarter on 13% higher revenues, per the Earnings Trends issued on May 31, 2018.
On the other hand, Consumer Discretionary (97.2% companies reported so far) logged 82.9% earnings beat ratio and a 68.6% revenue beat ratio. The sector’s earnings and revenue growth was 15.1% and 5.8%, respectively.
ETFs to Play
For investors interested in riding out this uptrend in Nasdaq, we suggest five ETFs that track this key American tech-heavy index.
PowerShares QQQ ETF
The underlying Nasdaq-100 Index includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization. The fund charges 20 bps in fees.
Fidelity Nasdaq Composite Index Tracking ETF
This fund follows the Nasdaq Composite Index. Cash takes the top spot with nearly 11.23% share of assets, followed by Apple (6.41%), Microsoft (5.76%) and Amazon (5.09%). It charges investors 21 bps in fees per year.
First Trust NASDAQ-100 Equal Weighted Index Fund
The fund looks to replicate the performance of the NASDAQ-100 Equal Weighted index. The fund appears heavily invested in the Technology sector with about 36% allocation, followed by about 24.2% in Consumer Services, 19.1% in Health Care and 10.6% in Industrials. The fund charges 60 bps in annual fees.
Direxion NASDAQ-100 Equal Weighted Index Shares
The underlying NASDAQ 100 Equal Weighted Index includes 100 of the largest non-financial securities listed on NASDAQ, but instead of being weighted by market capitalization, each of the constituents is initially set at 1.00%. The fund charges 35 bps in fees.
ProShares UltraPro QQQ
The fund offers triple leverage exposure to the NASDAQ-100 Index and charges 95 bps in fees.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Follow us on Twitter: https://twitter.com/zacksresearch
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.