Should you consider adding the First Trust NASDAQ-100 Select Equal Weight ETF (QQEW) to your investment watchlist?

Overview of the First Trust NASDAQ-100 Select Equal Weight ETF (QQEW)

Introduced on April 19, 2006, the First Trust NASDAQ-100 Select Equal Weight ETF (QQEW) is a passively managed fund that aims to provide investors with broad access to the U.S. large-cap growth sector.

Managed by First Trust Advisors, this ETF has accumulated over $1.73 billion in assets, positioning it among the more sizable funds targeting large-cap growth equities in the United States.

Understanding Large Cap Growth Investments

Large-cap companies typically have market values exceeding $10 billion. These firms are generally seen as more stable, offering consistent cash flows and experiencing less price fluctuation compared to mid- and small-cap stocks.

Growth stocks are characterized by their rapid expansion, higher valuations, and above-average increases in sales and earnings. However, investors should be aware that these stocks can be more volatile. While growth stocks often outperform value stocks during strong market rallies, value stocks have historically delivered superior returns across various market conditions.

Expense Considerations

When comparing ETFs, lower fees can lead to better long-term outcomes if all other factors are equal. Therefore, it’s crucial to review an ETF’s expense ratio before investing.

QQEW charges an annual expense ratio of 0.55%, which is comparable to similar funds in its category.

The ETF offers a trailing 12-month dividend yield of 0.43%.

Sector Allocation and Leading Holdings

Despite the benefits of diversification, it’s wise to examine an ETF’s portfolio before investing. Most ETFs, including QQEW, provide daily transparency of their holdings.

QQEW allocates roughly 50.5% of its assets to the Information Technology sector, with Healthcare and Telecommunications also making up significant portions of the portfolio.

Among individual stocks, Western Digital Corporation (WDC) represents about 3.21% of the fund’s assets, followed by ASML Holding N.V. (ASML) and Lam Research Corporation (LRCX).

The top ten holdings collectively account for approximately 26.18% of the fund’s total assets.

Performance and Risk Profile

This ETF seeks to replicate the performance of the NASDAQ-100 Equal Weighted Index, before fees and expenses. The index tracks the 50 companies from the Nasdaq-100 with the highest combined quality and growth metrics.

Year-to-date, QQEW has declined by about 5.29%, but has gained roughly 3.83% over the past year (as of 02/27/2026). During the last 52 weeks, its share price has ranged from $106.81 to $146.24.

With a beta of 1.06 and a three-year standard deviation of 17.41%, QQEW is considered a moderate risk option. The fund holds around 51 stocks, helping to spread out company-specific risks.

Alternative ETF Options

QQEW holds a Zacks ETF Rank of 3 (Hold), reflecting factors such as expected returns, costs, and momentum. It is a suitable choice for those interested in large-cap growth strategies, but other ETFs in this space are also worth considering.

For example, the Vanguard Growth ETF (VUG) and Invesco QQQ (QQQ) track similar indices. VUG manages $196.69 billion in assets with a 0.03% expense ratio, while QQQ oversees $399.83 billion and charges 0.18% in fees.

Conclusion

Passively managed ETFs like QQEW are increasingly favored by both individual and institutional investors due to their low costs, transparency, flexibility, and tax advantages. They are especially well-suited for long-term investment strategies.