First Trust NASDAQ-100 Ex-Tech ETF: A Smart Beta Overview

Analyzing the First Trust NASDAQ-100 Ex-Tech ETF (QQXT), which seeks broad growth exposure while avoiding tech stocks. Despite recent performance issues, investor interest may persist due to diverse holdings and strategic structure.

Date: 19-04-2025

AI Rating: 5

The First Trust NASDAQ-100 Ex-Technology Sector ETF (QQXT) offers an alternative for investors seeking exposure to non-tech stocks while employing a smart beta strategy. With the ETF managing over $586.76 million, it holds a diversified portfolio, primarily in the Industrials sector (20.50%). Comparatively, the fund carries a relatively high expense ratio of 0.60%, which could impact long-term returns compared to lower-cost alternatives. The 12-month trailing dividend yield stands at 0.91%, providing some income return to investors.

Performance Insight The fund has faced struggles this year, showing a loss of approximately -2.95% year-to-date but has gained about 6.09% over the last 12 months. This volatility suggests potential market challenges, but it also may present an opportunity for investors looking to enter at a relative low. Additionally, QQXT has a beta of 0.97, indicating it closely mirrors market movements, presenting moderate risk.

Analysis of Holdings The major players within QQXT include Cintas Corporation (CTAS), Paychex, Inc. (PAYX), and Tesla, Inc. (TSLA), with CTAS representing 1.90% of total assets. This allocation points to some concentration risk, though the ETF's overall diversification with 57 holdings minimizes company-specific risks.

Competitor Comparison In comparison to its peers, such as the Vanguard Growth ETF (VUG) and Invesco QQQ (QQQ), which have lower expense ratios (0.04% and 0.20%, respectively), QQXT’s higher cost might deter some investors seeking value. VUG, in particular, could attract growth-oriented investors seeking broad exposure at a lower cost, while QQQ offers tech-heavy exposure.

Stocks: QQXT CTAS PAYX TSLA