First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW)

Overview

The First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW) seeks investment results that correspond generally to the price and yield of the NASDAQ-100 Equal Weighted Index. It provides exposure to the largest non-financial companies listed on the NASDAQ, but unlike the market-cap weighted QQQ, each company holds roughly the same weight in the portfolio. This mitigates concentration risk and offers broader participation in the index's performance.

Reputation and Reliability

First Trust Advisors L.P. is a well-established ETF provider with a strong track record and a wide range of investment products.

Management Expertise

First Trust has a dedicated team of investment professionals with experience in managing and tracking various indices.

Goal

To seek investment results that correspond generally to the price and yield, before fees and expenses, of the NASDAQ-100 Equal Weighted Index.

Investment Approach and Strategy

Strategy: The ETF aims to track the NASDAQ-100 Equal Weighted Index, rebalancing quarterly to maintain equal allocations.

Composition The ETF holds stocks of the approximately 100 largest non-financial companies listed on the NASDAQ Stock Market. All are held in roughly equal weight.

Market Share: Data not reliably available to determine precise current market share.

Total Net Assets (AUM): 1410000000

Key Competitors

• Invesco QQQ Trust (QQQ)
• SPDR Portfolio S&P 500 ETF (SPLG)

Competitive Landscape

The ETF industry is highly competitive, with QQQ dominating the NASDAQ-100 space. QQEW offers a distinct advantage over market-cap weighted ETFs like QQQ by mitigating concentration risk and offering broader exposure. However, QQQ has much larger AUM and daily trading volume, offering higher liquidity and lower bid-ask spreads. SPLG tracks the S&P 500 and is a broader market ETF.

Historical Performance: Historical performance data requires a subscription to financial data services, but the ETF will perform differently to QQQ due to the weighting scheme.

Benchmark Comparison: The ETFu2019s performance is compared to the NASDAQ-100 Equal Weighted Index. The fund aims to closely mirror the performance of the underlying index.

Expense Ratio: 0.0058

Average Trading Volume

The average trading volume for QQEW is moderate, indicating reasonable liquidity.

Bid-Ask Spread

The bid-ask spread can vary, but generally indicates a moderate cost to trade shares.

Market Environment Factors

Economic indicators, sector growth in technology and consumer discretionary, and overall market conditions affect QQEW.

Growth Trajectory

Growth is influenced by the performance of the NASDAQ-100's constituent companies and the fund's equal weighting strategy.

Competitive Edge

QQEW's main advantage lies in its equal weighting strategy, which reduces concentration risk compared to market-cap weighted ETFs. This allows for greater participation in the growth of smaller companies within the NASDAQ-100. This may result in slightly lower concentration in largest mega cap tech stocks. The fund offers diversification within the NASDAQ-100, making it an appealing option for investors seeking broader exposure to the index's constituents.

Volatility

Volatility will be dependent on the underlying volatility of the companies in the NASDAQ-100.

Market Risk

The ETF is subject to market risk, particularly the risk associated with technology and growth stocks that comprise the NASDAQ-100.

Ideal Investor Profile

Investors who seek exposure to the NASDAQ-100 but want to avoid concentration risk in a few large companies. This could include those seeking growth with diversification.

Market Risk

Suitable for long-term investors seeking broad market exposure to growth stocks, or those using QQEW as part of a wider investment strategy.

The First Trust NASDAQ-100 Equal Weighted Index Fund offers investors a unique approach to accessing the NASDAQ-100 by equally weighting its components, which helps mitigate concentration risk. While it competes with market-cap weighted alternatives like QQQ, its diversification may be appealing to investors seeking broader exposure. Investors should consider the expense ratio, liquidity, and potential performance differences compared to the standard NASDAQ-100 trackers. Ultimately, the ETF aims to replicate the index's performance while maintaining an equal allocation across all constituents.

Data Sources:

• First Trust Advisors L.P. Fact Sheet, ETF.com, Yahoo Finance

Disclaimers:

The information provided is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Consult with a qualified financial advisor before making any investment decisions.