The Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE) was launched on 03/21/2012, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer 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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $1.20 billion, this makes it one of the average sized ETFs in the Style Box - Large Cap Growth. QQQE is managed by Direxion. This particular fund seeks to match the performance of the NASDAQ-100 Equal Weighted Index before fees and expenses.
The NASDAQ-100 Equal Weighted Index consists of companies in the NASDAQ-100 Index but each of the securities is initially set at a weight of 1.00% of the Index. The NASDAQ-100 Index includes 100 of the largest non-financial securities listed on NASDAQ based on capitalization.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.72%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
QQQE's heaviest allocation is in the Information Technology sector, which is about 40.80% of the portfolio. Its Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Cintas Corp (CTAS) accounts for about 1.08% of total assets, followed by Tesla Inc (TSLA) and Paychex Inc (PAYX).
QQQE's top 10 holdings account for about 10.65% of its total assets under management.
Performance and Risk
The ETF has lost about -0.21% so far this year and it's up approximately 6.52% in the last one year (as of 05/05/2025). In the past 52-week period, it has traded between $76.98 and $97.98.
The ETF has a beta of 1.08 and standard deviation of 21.65% 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
Direxion NASDAQ-100 Equal Weighted Index Shares 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 $152.03 billion in assets, Invesco QQQ has $307.69 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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Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE): ETF Research Reports Paychex, Inc. (PAYX): Free Stock Analysis Report Cintas Corporation (CTAS): Free Stock Analysis Report Tesla, Inc. (TSLA): 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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