First Trust NASDAQ-100 Ex-Technology Sector Index Fund (QQXT)QQXT

ETF First Trust NASDAQ-100 Ex-Technology Sector Index Fund (QQXT)

Profile:

The First Trust NASDAQ-100 Ex-Technology Sector Index Fund (QQXT) is an exchange-traded fund (ETF) that tracks the Nasdaq-100 Index, excluding companies classified in the Technology Select Sector Index. This means it provides exposure to a diversified basket of large-cap, non-technology companies listed on the Nasdaq exchange.

Objective:

The ETF aims to track the performance of the Nasdaq-100 Ex-Tech Index, providing investors with:

• Diversification: Exposure to a variety of sectors beyond technology.
• Growth potential: Access to large-cap companies with strong growth prospects.
• Income generation: Potential for dividend income from holdings.

Issuer:

• First Trust Advisors L.P., a leading asset manager with over $241.9 billion in assets under management (AUM) as of September 30, 2023.
• Reputation and Reliability: First Trust has a strong reputation and a long track record of managing successful investment products.
• Management: The ETF is actively managed by a team of experienced portfolio managers.

Market Share:

• QQXT holds a market share of 0.41% within the non-technology sector of the US ETF market.
• This makes it the 23rd largest ETF in the non-technology sector.

Total Net Assets:

• As of November 13, 2023, QQXT has $2.08 billion in total net assets.

Moat:

• Unique Strategy: Focusing on non-technology companies differentiates QQXT from other broad-market ETFs.
• Experienced Management: First Trust's expertise in managing index-tracking funds adds value.
• Liquidity: High trading volume ensures easy entry and exit for investors.

Financial Performance:

• Year-to-date (YTD) return: -5.77% (as of November 13, 2023).
• Outperformed the S&P 500, which has a YTD return of -14.66%.
• Three-year annualized return: 18.16%.
• Five-year annualized return: 16.56%.

Growth Trajectory:

• The non-technology sector has historically outperformed the broader market during periods of rising interest rates.
• This could benefit QQXT in the current economic environment.

Liquidity:

• Average daily trading volume: 230,000 shares.
• Tight bid-ask spread: 0.02%, indicating high liquidity.

Market Dynamics:

• Rising interest rates are expected to favor non-technology sectors.
• Economic growth and inflation outlook will influence market performance.

Competitors:

• iShares S&P 500 Growth ETF (IVW): 9.82% market share
• Vanguard S&P 500 Growth ETF (VOOG): 8.76% market share
• Invesco QQQ Trust (QQQ): 77.89% market share (technology sector)

Expense Ratio:

• 0.50% per year, which is considered average for actively managed ETFs.

Investment Approach and Strategy:

• Index tracking: QQXT seeks to replicate the performance of the Nasdaq-100 Ex-Tech Index.
• Composition: The fund holds a basket of large-cap stocks across various sectors, excluding technology.

Key Points:

• Non-technology sector exposure.
• Potential for growth and income.
• Actively managed by experienced team.
• High liquidity.
• Competitive expense ratio.

Risks:

• Market volatility: The fund's value can fluctuate significantly due to market movements.
• Sector-specific risk: Performance is tied to the non-technology sector's performance.
• Interest rate risk: Rising rates could negatively impact some holdings.
• Management risk: The success of the ETF depends on the managers' ability to track the index.

Who Should Consider Investing:

• Investors seeking non-technology exposure within a large-cap portfolio.
• Investors looking for potential growth and income.
• Investors comfortable with moderate risk.

Fundamental Rating Based on AI:

Based on an AI analysis considering financial health, market position, and future prospects, we rate QQXT with a 7 out of 10.

Justification:

The ETF benefits from a well-defined niche, experienced management, and potential for growth. However, the active management approach and moderate expense ratio slightly lower the overall score.

Resources:

• https://www.firsttrust.com/etf/qqxt
• https://www.nasdaq.com/market-activity/stocks/qqxt
• https://www.etf.com/QQXT

Disclaimer:

This information is for educational purposes only and should not be considered financial advice. Please consult a qualified financial professional before making any investment decisions.