Should You Invest in the First Trust NASDAQ-100-Technology Sector ETF (QTEC)?

Designed to provide broad exposure to the Technology - Broad segment of the equity market, the First Trust NASDAQ-100-Technology Sector ETF (QTEC) is a passively managed exchange traded fund launched on 04/19/2006.An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.Index DetailsThe fund is sponsored by First Trust Advisors. It has amassed assets over $3.91 billion, making it one of the larger ETFs attempting to match the performance of the Technology - Broad segment of the equity market. QTEC seeks to match the performance of the NASDAQ-100 Technology Sector Index before fees and expenses.The NASDAQ-100 Technology Sector Index is an equal-weighted index based on the securities of the NASDAQ-100 Index that are classified as technology.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 0.57%, making it on par with most peer products in the space.It has a 12-month trailing dividend yield of 0.02%.Sector Exposure and Top HoldingsWhile ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation in the Information Technology sector--about 90.30% of the portfolio.Looking at individual holdings, Broadcom Inc. (AVGO) accounts for about 2.44% of total assets, followed by Microchip Technology Incorporated (MCHP) and Globalfoundries Inc. (GFS).The top 10 holdings account for about 23.60% of total assets under management.Performance and RiskYear-to-date, the First Trust NASDAQ-100-Technology Sector ETF return is roughly 4.10% so far, and was up about 6.27% over the last 12 months (as of 01/30/2025). QTEC has traded between $169.92 and $205.38 in this past 52-week period.The ETF has a beta of 1.14 and standard deviation of 30.24% for the trailing three-year period, making it a high risk choice in the space. With about 46 holdings, it has more concentrated exposure than peers.AlternativesFirst Trust NASDAQ-100-Technology Sector ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, QTEC is an outstanding option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $73.10 billion in assets, Vanguard Information Technology ETF has $84.49 billion. XLK has an expense ratio of 0.09% and VGT charges 0.10%.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 First Trust NASDAQ-100-Technology Sector ETF (QTEC): ETF Research Reports Microchip Technology Incorporated (MCHP): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report Technology Select Sector SPDR ETF (XLK): ETF Research Reports Vanguard Information Technology ETF (VGT): ETF Research Reports GlobalFoundries Inc. (GFS): 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