Is First Trust NASDAQ-100 Ex-Technology Sector ETF (QQXT) a Strong ETF Right Now?

The First Trust NASDAQ-100 Ex-Technology Sector ETF (QQXT) made its debut on 02/08/2007, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Growth category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

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.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

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.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

Because the fund has amassed over $586.76 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Growth. QQXT is managed by First Trust Advisors. 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.

Cost & Other Expenses

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

Annual operating expenses for this ETF are 0.60%, making it one of the more expensive products in the space.

The fund has a 12-month trailing dividend yield of 0.91%.

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 Industrials sector - about 20.50% of the portfolio. Consumer Discretionary and Healthcare round out the top three.

When you look at individual holdings, Cintas Corporation (CTAS) accounts for about 1.90% of the fund's total assets, followed by Paychex, Inc. (PAYX) and Tesla, Inc. (TSLA).

The top 10 holdings account for about 18.67% of total assets under management.

Performance and Risk

Year-to-date, the First Trust NASDAQ-100 Ex-Technology Sector ETF has lost about -2.95% so far, and is up roughly 6.09% over the last 12 months (as of 04/18/2025). QQXT has traded between $84.34 and $99.33 in this past 52-week period.

The fund has a beta of 0.97 and standard deviation of 17.88% for the trailing three-year period, which makes QQXT a medium risk choice in this particular space. With about 57 holdings, it effectively diversifies company-specific risk.

Alternatives

First Trust NASDAQ-100 Ex-Technology Sector 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 $137.58 billion in assets, Invesco QQQ has $285.84 billion. VUG has an expense ratio of 0.04% and QQQ charges 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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This article originally published on Zacks Investment Research (zacks.com).

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