(QQEW) First Trust NASDAQ-100 - Ratings and Ratios

The First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW) is designed to offer investors a diversified exposure to high-growth technology companies by equally weighting each constituent of the NASDAQ-100 Index. This approach significantly reduces concentration risk compared to traditional market-cap weighted indexes, where a few large companies can dominate performance. By ensuring each of the 100 non-financial companies has an equal voice, the fund provides a more balanced portfolio that aligns with the idea of not putting all your eggs in one basket.

As an ETF, QQEW trades on the NASDAQ exchange with a ticker symbol of QQEW and falls under the Large Growth category. With an AUM of approximately $1.95 billion, it offers the liquidity that many institutional investors require. The funds structure is transparent, holding securities that mirror the equal-weighted NASDAQ-100 Index, ensuring that investors gain exposure to a broad range of high-growth companies without the skew of market capitalization.

For fund managers, QQEWs equal-weighting strategy may lead to slightly higher tracking error compared to its market-cap counterpart, but it often results in more consistent performance across different market cycles. The expense ratio, while competitive, is a consideration for cost-conscious investors. Despite this, the funds ability to maintain efficient tracking of its underlying index makes it a viable option for those seeking diversified growth exposure with reduced concentration risk.

In summary, QQEW is an attractive option for investors looking to tap into the growth potential of the NASDAQ-100 Index with a more balanced approach. Its equal-weighting strategy not only mitigates the risks associated with a few dominant companies but also aligns with the principle of diversification, making it a prudent choice for those seeking to avoid overexposure to individual tech giants.