Should Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE) Be on Your Investing Radar?

Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE) is a passively managed exchange traded fund launched on 03/21/2012.The fund is sponsored by Direxion. It has amassed assets over $1.28 billion, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.Why Large Cap GrowthLarge cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.CostsCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.Annual operating expenses for this ETF are 0.35%, putting it on par with most peer products in the space.It has a 12-month trailing dividend yield of 0.84%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation to the Information Technology sector--about 40.70% of the portfolio. Industrials and Consumer Discretionary round out the top three.Looking at individual holdings, Diamondback Energy Inc (FANG) accounts for about 1.09% of total assets, followed by Constellation Energy (CEG) and Broadcom Inc (AVGO).The top 10 holdings account for about 10.53% of total assets under management.Performance and RiskQQQE seeks to match the performance of the NASDAQ-100 Equal Weighted Index before fees and expenses. 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.The ETF has gained about 1.87% so far this year and is up roughly 9.75% in the last one year (as of 01/16/2025). In the past 52-week period, it has traded between $82.41 and $96.24.The ETF has a beta of 1.03 and standard deviation of 21.51% for the trailing three-year period, making it a medium risk choice in the space. With about 102 holdings, it effectively diversifies company-specific risk.AlternativesDirexion NASDAQ-100 Equal Weighted Index Shares holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, QQQE is an outstanding option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $157.29 billion in assets, Invesco QQQ has $321.60 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.Bottom-LineRetail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.To 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 Constellation Energy Corporation (CEG): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports Diamondback Energy, Inc. (FANG): Free Stock Analysis Report Vanguard Growth ETF (VUG): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks