QQQE - QQQE: Tech Exposure Without Overweighting The Magnificent Seven

2024-02-04 11:08:28 ET

Summary

• Tech and growth stocks have outperformed since the financial crisis, but their valuations have spiked, causing concern for some investors.
• QQQE offers diversified equity exposure while tilting tech and growth, with reduced exposure to overvalued mega-cap tech stocks.
• QQQE seems a particularly interesting choice for tech and growth investors concerned about valuations in some of the larger names in this space.

Tech and growth have significantly outperformed since the financial crisis, due to rising earnings and valuations. The Magnificent Seven mega-cap growth stocks have performed even better, been responsible for most of the S&P 500 gains since early 2023. These gains have caused valuations to spike, with most Magnificent Seven companies sporting P/E ratios above 30.0x, some higher than 50.0x. Some investors want tech or growth exposure, but are put off by these companies and their valuations. For these, the Direxion NASDAQ-100 Equal Weighted Index Shares ETF (NASDAQ: QQQE ) might be an interesting choice....

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