A smart beta exchange traded fund, the First Trust NASDAQ-100 Equal Weighted ETF (QQEW) 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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of 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
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.92 billion, making it one of the larger ETFs in the Style Box - Large Cap Growth. QQEW seeks to match the performance of the NASDAQ-100 Equal Weighted Index before fees and expenses.
The NASDAQ-100 Equal Weighted Index is the equal-weighted version of the NASDAQ-100 Index which includes 100 of the largest non-financial securities listed on NASDAQ based on market capitalization.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.55% for this ETF, which makes it on par with most peer products in the space.
QQEW's 12-month trailing dividend yield is 0.40%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 42.9% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Looking at individual holdings, Palantir Technologies Inc. (class A) (PLTR) accounts for about 1.38% of total assets, followed by Zscaler, Inc. (ZS) and Axon Enterprise Inc. (AXON).
Its top 10 holdings account for approximately 12.46% of QQEW's total assets under management.
Performance and Risk
The ETF return is roughly 11.01% and is up roughly 11.82% so far this year and in the past one year (as of 07/07/2025), respectively. QQEW has traded between $106.81 and $138.44 during this last 52-week period.
The fund has a beta of 1.06 and standard deviation of 20.15% for the trailing three-year period, which makes QQEW a medium risk choice in this particular space. With about 102 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust NASDAQ-100 Equal Weighted 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 $176.86 billion in assets, Invesco QQQ has $355.51 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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First Trust NASDAQ-100 Equal Weighted ETF (QQEW): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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