Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the First Trust NASDAQ-100 Ex-Technology Sector ETF (QQXT) is a passively managed exchange traded fund launched on 02/08/2007.
The fund is sponsored by First Trust Advisors. It has amassed assets over $590.06 million, 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
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Also, growth stocks are a type of equity that carries more risk compared to others. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
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 0.60%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 0.90%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 19.80% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Starbucks Corporation (SBUX) accounts for about 2.19% of total assets, followed by Gilead Sciences, Inc. (GILD) and Vertex Pharmaceuticals Incorporated (VRTX).
The top 10 holdings account for about 20.77% of total assets under management.
Performance and Risk
QQXT seeks to match the performance of the NASDAQ-100 Ex-Tech Sector Index before fees and expenses. The NASDAQ-100 Ex-Tech Sector Index is an equal-weighted index based on the securities of the NASDAQ-100 Index that are not classified as technology and, as a result, is a subset of the NASDAQ-100 Index. The NASDAQ-100 Index includes 100 of the largest domestic and international non-financial companies listed on NASDAQ based on market capitalization.
The ETF has lost about -2.28% so far this year and was up about 6.06% in the last one year (as of 04/16/2025). In the past 52-week period, it has traded between $84.34 and $99.33.
The ETF has a beta of 0.97 and standard deviation of 17.86% for the trailing three-year period, making it a medium risk choice in the space. With about 57 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust NASDAQ-100 Ex-Technology Sector 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, QQXT is a sufficient 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) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $141.39 billion in assets, Invesco QQQ has $293.62 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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First Trust NASDAQ-100 Ex-Technology Sector ETF (QQXT): ETF Research Reports Starbucks Corporation (SBUX): Free Stock Analysis Report Gilead Sciences, Inc. (GILD): Free Stock Analysis Report Vertex Pharmaceuticals Incorporated (VRTX): Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports Vanguard Growth ETF (VUG): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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