QQEW - QQEW: Inferior Return To The Nasdaq 100 Index

2024-06-16 20:55:10 ET

Summary

• QQEW tracks the Nasdaq 100 index with an equal-weighted strategy and higher expense ratio.
• QQEW has rebounded strongly from 2022, but still trails the S&P 500 and Nasdaq 100 index in returns.
• QQEW offers lower volatility and more diversification than QQQ, but has inferior long-term returns due to lower exposure to growth stocks.

ETF Overview

First Trust NASDAQ-100 Equal Weighted Index Fund ETF ( QQEW ) has a portfolio of stocks as the Nasdaq 100 index. However, unlike Nasdaq 100 index's market-weighted strategy, QQEW implements an equal-weighted strategy and rebalances its portfolio quarterly. As a result, QQEW offers better diversification than the Nasdaq 100 index but has higher expense ratio than funds that track the index. Its long-term returns are not superior to the Nasdaq 100 index, either. Therefore, we think investors should simply own funds that track the Nasdaq 100 index instead....

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