Should First Trust NASDAQ-100 Ex-Technology Sector ETF (QQXT) Be on Your Investing Radar?

Core Viewpoint - The First Trust NASDAQ-100 Ex-Technology Sector ETF (QQXT) provides broad exposure to the Large Cap Growth segment of the US equity market, with assets exceeding $1.11 billion, making it a significant player in this category [1]. Group 1: Large Cap Growth Characteristics - Large cap companies typically have a market capitalization above $10 billion, offering stability and more reliable cash flows compared to mid and small cap companies [2]. - Growth stocks are characterized by faster growth rates, higher valuations, and above-average sales and earnings growth rates, but they also exhibit higher volatility [3]. Group 2: Costs and Performance - The ETF has an annual operating expense ratio of 0.6%, which is relatively high compared to other products in the space, and a 12-month trailing dividend yield of 0.73% [4]. - QQXT aims to match the performance of the NASDAQ-100 Ex-Tech Sector Index, which includes non-technology companies from the NASDAQ-100 Index [7]. - The ETF has returned approximately 6.5% year-to-date and 10.6% over the past year, with a trading range between $84.34 and $101.22 in the last 52 weeks [8]. Group 3: Sector Exposure and Holdings - The ETF has the largest allocation to the Industrials sector at about 19.3%, followed by Healthcare and Consumer Discretionary [5]. - Old Dominion Freight Line, Inc. (ODFL) represents about 1.89% of total assets, with the top 10 holdings accounting for approximately 18.65% of total assets under management [6]. Group 4: Alternatives and Market Position - QQXT carries a Zacks ETF Rank of 3 (Hold), indicating it is a reasonable option for investors seeking exposure to the Large Cap Growth area [10]. - Alternatives such as the Vanguard Growth ETF (VUG) and Invesco QQQ (QQQ) have significantly larger assets, with VUG at $186.05 billion and QQQ at $369.46 billion, and lower expense ratios of 0.04% and 0.2%, respectively [11]. Group 5: Industry Trends - Passively managed ETFs are gaining popularity among both institutional and retail investors due to their low cost, transparency, flexibility, and tax efficiency, making them suitable for long-term investment strategies [12].