Launched on April 19, 2006, the First Trust NASDAQ-100 Select Equal Weight ETF (QQEW) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.73 billion, making it one of the larger 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. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
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. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
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.
Annual operating expenses for this ETF are 0.55%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.43%.
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 Information Technology sector -- about 50.5% of the portfolio. Healthcare and Telecom round out the top three.
Looking at individual holdings, Western Digital Corporation (WDC) accounts for about 3.21% of total assets, followed by Asml Holding N.v. (new York Registry Shares) (ASML) and Lam Research Corporation (LRCX).
The top 10 holdings account for about 26.18% of total assets under management.
Performance and Risk
QQEW seeks to match the performance of the NASDAQ-100 Equal Weighted Index before fees and expenses. 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.
The ETF has lost about 5.29% so far this year and is up about 3.83% in the last one year (as of 02/27/2026). In the past 52-week period, it has traded between $106.81 and $146.24.
The ETF has a beta of 1.06 and standard deviation of 17.41% for the trailing three-year period, making it a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust NASDAQ-100 Select Equal Weight 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, QQEW is a reasonable 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 $196.69 billion in assets, Invesco QQQ has $399.83 billion. VUG has an expense ratio of 0.03% and QQQ charges 0.18%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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 Select Equal Weight ETF (QQEW): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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