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Should You Invest in the First Trust NASDAQ-100-Technology Sector ETF (QTEC)?
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Launched on 04/19/2006, the First Trust NASDAQ-100-Technology Sector ETF (QTEC - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market.
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.
Additionally, sector ETFs offer convenient 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 6, placing it in top 38%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $3.93 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
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 0.57%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.13%.
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 in the Information Technology sector--about 91.60% 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
So far this year, QTEC has added about 6.66%, and it's up approximately 50.76% in the last one year (as of 03/19/2024). During this past 52-week period, the fund has traded between $118.86 and $195.66.
The ETF has a beta of 1.19 and standard deviation of 30.14% 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 a great 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.
Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index and the Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index. Vanguard Information Technology ETF has $64.69 billion in assets, Technology Select Sector SPDR ETF has $66.35 billion. VGT has an expense ratio of 0.10% and XLK charges 0.09%.
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)?
Launched on 04/19/2006, the First Trust NASDAQ-100-Technology Sector ETF (QTEC - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market.
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.
Additionally, sector ETFs offer convenient 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 6, placing it in top 38%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $3.93 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
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 0.57%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.13%.
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 in the Information Technology sector--about 91.60% 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
So far this year, QTEC has added about 6.66%, and it's up approximately 50.76% in the last one year (as of 03/19/2024). During this past 52-week period, the fund has traded between $118.86 and $195.66.
The ETF has a beta of 1.19 and standard deviation of 30.14% 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 a great 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.
Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index and the Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index. Vanguard Information Technology ETF has $64.69 billion in assets, Technology Select Sector SPDR ETF has $66.35 billion. VGT has an expense ratio of 0.10% and XLK charges 0.09%.
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.