Is First Trust NASDAQ-100 Ex-Technology Sector ETF (QQXT) a Strong ETF Right Now?

The First Trust NASDAQ-100 Ex-Technology Sector ETF (QQXT), a smart beta ETF with $1.09 billion in assets, is designed to track the NASDAQ-100 Ex-Tech Sector Index. QQXT's largest sector allocation is in Industrials (19.9%), and its top holdings include Netflix (2.13%) and Tesla. The ETF has returned 3.67% year-to-date and 9.74% over the last 12 months, with an expense ratio of 0.60% and a 12-month trailing dividend yield of 0.85%.

Analysis

The First Trust NASDAQ-100 Ex-Technology Sector ETF (QQXT) is a smart beta fund with $1.09 billion in assets under management, designed to offer large-cap growth exposure by tracking the NASDAQ-100 Ex-Tech Sector Index, which is an equal-weighted index of NASDAQ-100 components excluding technology companies. This strategy results in a portfolio of approximately 57 holdings, where the top 10 holdings account for about 20.04% of total assets, indicating diversification beyond typical market-cap concentrations. The ETF's heaviest sector allocation is to Industrials (19.9%), followed by Healthcare and Consumer Discretionary, with prominent individual holdings including Netflix (2.13% of assets), Tesla, and Copart. QQXT has demonstrated a year-to-date return of 3.67% and a 12-month return of approximately 9.74% as of June 20, 2025, with a 12-month trailing dividend yield of 0.85%. A key consideration is its 0.60% annual operating expense ratio, which positions it as one of the more expensive products in its category when compared to alternatives like the Vanguard Growth ETF (VUG) at 0.04% and Invesco QQQ (QQQ) at 0.20%. The fund exhibits a medium risk profile, with a beta of 0.94 and a standard deviation of 16.46% for the trailing three-year period.

Key Decisions for Investors

• Investors seeking differentiated exposure to large-cap growth stocks outside the technology sector, through an equal-weighted strategy with significant allocations to Industrials, Healthcare, and Consumer Discretionary, may find QQXT a relevant option to evaluate.
• Carefully consider the 0.60% expense ratio, which is substantially higher than those of broad market-cap weighted alternatives like VUG and QQQ, and assess its potential impact on net returns relative to QQXT's specific investment strategy and performance (9.74% over 12 months).