Is Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE) a Strong ETF Right Now?

A smart beta exchange traded fund, the Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE) debuted on 03/21/2012, and offers broad exposure to the Style Box - Large Cap Growth category of the market.What Are Smart Beta ETFs?For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.Fund Sponsor & IndexBecause the fund has amassed over $1.28 billion, this makes it one of the average sized ETFs in the Style Box - Large Cap Growth. QQQE is managed by Direxion. Before fees and expenses, this particular fund seeks to match the performance of the NASDAQ-100 Equal Weighted Index.The NASDAQ-100 Equal Weighted Index consists of companies in the NASDAQ-100 Index but each of the securities is initially set at a weight of 1.00% of the Index. The NASDAQ-100 Index includes 100 of the largest non-financial securities listed on NASDAQ based on capitalization.Cost & Other ExpensesExpense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.Annual operating expenses for this ETF are 0.35%, making it on par with most peer products in the space.It's 12-month trailing dividend yield comes in at 0.86%.Sector Exposure and Top HoldingsETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.This ETF has heaviest allocation in the Information Technology sector - about 38.40% of the portfolio. Healthcare and Industrials round out the top three.When you look at individual holdings, Pdd Holdings Inc (PDD) accounts for about 1.52% of the fund's total assets, followed by Micron Technology Inc (MU) and Illumina Inc (ILMN).QQQE's top 10 holdings account for about 10.98% of its total assets under management.Performance and RiskThe ETF has added roughly 7.79% and it's up approximately 27.81% so far this year and in the past one year (as of 10/28/2024), respectively. QQQE has traded between $70.70 and $92.57 during this last 52-week period.QQQE has a beta of 1.02 and standard deviation of 21.67% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 102 holdings, it effectively diversifies company-specific risk.AlternativesDirexion NASDAQ-100 Equal Weighted Index Shares is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.Vanguard Growth ETF (VUG) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ) tracks NASDAQ-100 Index. Vanguard Growth ETF has $143.48 billion in assets, Invesco QQQ has $300.16 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE): ETF Research Reports Micron Technology, Inc. (MU): Free Stock Analysis Report Illumina, Inc. (ILMN): Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports Vanguard Growth ETF (VUG): ETF Research Reports PDD Holdings Inc. Sponsored ADR (PDD): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks