Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the First Trust NASDAQ-100 Select Equal Weight ETF (QQEW), a passively managed exchange traded fund launched on April 19, 2006.
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.63 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 typically 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. Further, growth stocks have a higher level of volatility associated with them. 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
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 0.33%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 54.6% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Seagate Technology Holdings Plc (STX) accounts for about 2.31% of total assets, followed by Monolithic Power Systems, Inc. (MPWR) and Arm Holdings Plc (ARM).
The top 10 holdings account for about 21.66% 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 3.83% so far this year and was up about 12.84% in the last one year (as of 04/30/2026). In the past 52-week period, it has traded between $122.05 and $146.24.
The ETF has a beta of 1.07 and standard deviation of 17.65% for the trailing three-year period, making it a medium risk choice in the space. With about 52 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust NASDAQ-100 Select Equal Weight ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, QQEW is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth Index Fund ETF Shares (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth Index Fund ETF Shares has $210.39 billion in assets, Invesco QQQ has $432.83 billion. VUG has an expense ratio of 0.03% and QQQ charges 0.18%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 Reports
This article originally published on Zacks Investment Research (zacks.com).