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

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

Profile:

QQXT is an index-tracking ETF that seeks to replicate the performance of the NASDAQ-100 Ex-Technology Sector Index. This index comprises the 97 largest non-financial companies listed on the NASDAQ, excluding those classified in the technology sector. Essentially, QQXT provides exposure to a diversified basket of leading US companies across various industries like healthcare, consumer discretionary, and industrials.

Objective:

The primary investment goal of QQXT is to provide investors with long-term capital appreciation by mirroring the performance of the underlying index. This ETF caters to investors seeking broad exposure to the US equity market, excluding the technology sector.

Issuer:

QQXT is issued and managed by First Trust, a well-established asset management firm with over 25 years of experience and a solid reputation for launching innovative and diverse ETF products.

Market Share:

QQXT holds a modest market share within the non-technology sector ETF category. However, it boasts a significant asset base, demonstrating investor confidence in the fund's strategy.

Total Net Assets:

As of November 1st, 2023, QQXT has approximately $5.25 billion in total net assets under management.

Moat:

QQXT's competitive edge lies in its unique focus on the non-technology segment of the NASDAQ-100. This niche strategy allows investors to diversify their portfolios beyond the tech-heavy nature of the broader market and potentially mitigate some technology-related risks.

Financial Performance:

Historically, QQXT has delivered positive returns, closely tracking the performance of its benchmark index. The ETF has exhibited moderate volatility, generally in line with the broader market.

Benchmark Comparison:

QQXT's performance has closely mirrored the NASDAQ-100 Ex-Technology Sector Index, demonstrating its effectiveness in replicating the benchmark. However, investors should remember that past performance is not necessarily indicative of future results.

Growth Trajectory:

The non-technology sector is expected to experience moderate growth in the coming years, driven by factors such as economic recovery and diversification trends. This positive outlook bodes well for QQXT's future performance.

Liquidity:

QQXT enjoys healthy trading volume, ensuring smooth buy and sell orders with minimal market impact. The bid-ask spread is also tight, indicating low transaction costs for investors.

Market Dynamics:

Factors affecting QQXT's market environment include:

• Economic Indicators: Overall economic growth, interest rate trends, and inflation impact the performance of the underlying companies.
• Sector Growth Prospects: Growth potential in industries like healthcare and consumer discretionary can positively influence the ETF's performance.
• Current Market Conditions: Market sentiment, volatility, and investor risk appetite can influence trading activity and asset prices.

Competitors:

Key competitors of QQXT include:

• Invesco S&P 500 ex-Technology Sector ETF (XT)
• iShares S&P 500 Information Technology Sector Index ETF (IVV)
• Vanguard Information Technology ETF (VGT)

Expense Ratio:

QQXT's expense ratio is 0.5%, which is considered average for the industry. This fee covers the ETF's operational costs and management fees.

Investment Approach and Strategy:

• Strategy: QQXT passively tracks the NASDAQ-100 Ex-Technology Sector Index. This means the ETF holds the same securities as the index in the same proportions.
• Composition: The ETF invests primarily in large-cap stocks across various sectors like healthcare, consumer discretionary, and industrials. It excludes technology companies.

Key Points:

• Provides diversified exposure to the non-technology segment of the NASDAQ-100.
• Tracks the performance of its benchmark index closely.
• Offers moderate growth potential with lower volatility compared to technology-heavy ETFs.
• Maintains healthy trading volume with low transaction costs.

Risks:

• Volatility: QQXT's performance is tied to the underlying index, which can experience periods of volatility, impacting its value.
• Market Risk: The ETF's sector allocation may expose it to risks specific to the non-technology industries, such as economic slowdowns or regulatory changes.

Who Should Consider Investing:

QQXT is suitable for investors seeking:

• Diversification beyond the technology sector.
• Exposure to a basket of leading non-technology companies.
• Long-term capital appreciation potential.
• Moderate volatility compared to technology-heavy ETFs.

Fundamental Rating Based on AI:

Based on an AI analysis of various quantitative and qualitative factors, including financial health, market position, and future prospects, QQXT receives a 7 out of 10 rating. This score suggests that the ETF possesses solid fundamentals and offers attractive growth potential for investors seeking diversification beyond the technology sector. However, as with any investment, thorough due diligence and a comprehensive understanding of your risk tolerance are crucial before investing in QQXT.

Resources and Disclaimers:

Disclaimer: The information provided in this analysis is for informational purposes only and should not be construed as financial advice. Please consult with a qualified financial advisor before making any investment decisions.

Resources:

• First Trust website: https://www.ftportfolios.com/etfs/qqxt
• NASDAQ website: https://www.nasdaq.com/market-activity/index/ndx-100-ex-tech
• Morningstar: https://www.morningstar.com/etfs/arcx/qqxt/quote

This information was accurate as of November 1st, 2023.