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Is First Trust NASDAQ-100 Select Equal Weight ETF (QQEW) a Strong ETF Right Now?

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A smart beta exchange traded fund, the First Trust NASDAQ-100 Select Equal Weight ETF (QQEW - Free Report) debuted on 04/19/2006, and offers broad exposure to the Style Box - Large Cap Growth category of the market.

What Are Smart Beta ETFs?

For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.

Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.

Fund Sponsor & Index

The fund is sponsored by First Trust Advisors. It has amassed assets over $1.87 billion, making it one of the average sized ETFs in the Style Box - Large Cap Growth. QQEW, before fees and expenses, seeks to match the performance of the NASDAQ-100 Equal Weighted Index.

The Nasdaq-100 Select Equal Weight Index is designed to track the performance of the 50 companies from the Nasdaq-100 Index with the highest combined Blended Quality and Growth scores.

Cost & Other Expenses

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Operating expenses on an annual basis are 0.55% for QQEW, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.41%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 40.3% of the portfolio. Consumer Discretionary and Healthcare round out the top three.

Taking into account individual holdings, Micron Technology, Inc. (MU) accounts for about 1.4% of the fund's total assets, followed by Applied Materials, Inc. (AMAT) and Advanced Micro Devices, Inc. (AMD).

Its top 10 holdings account for approximately 12.97% of QQEW's total assets under management.

Performance and Risk

Year-to-date, the First Trust NASDAQ-100 Select Equal Weight ETF has lost about -0.8% so far, and is up roughly 12.92% over the last 12 months (as of 01/15/2026). QQEW has traded between $106.81 $146.24 in this past 52-week period.

The ETF has a beta of 1.06 and standard deviation of 17.50% 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 Select Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.

Vanguard Growth ETF (VUG) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ) tracks NASDAQ-100 Index. Vanguard Growth ETF has $202.35 billion in assets, Invesco QQQ has $407.22 billion. VUG has an expense ratio of 0.04% and QQQ changes 0.20%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth

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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