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

The Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE) was launched on 03/21/2012, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Growth category of the market.What Are Smart Beta ETFs?Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.Fund Sponsor & IndexThe fund is managed by Direxion, and has been able to amass over $1.2 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Growth. Before fees and expenses, QQQE 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 ExpensesCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.Annual operating expenses for this ETF are 0.35%, making it on par with most peer products in the space.The fund has a 12-month trailing dividend yield of 0.62%.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.Representing 38.8% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Consumer Discretionary and Industrials round out the top three.Taking into account individual holdings, Applovin Corp-class A (APP) accounts for about 1.4% of the fund's total assets, followed by Shopify Inc - Class A (SHOP) and Advanced Micro Devices (AMD).The top 10 holdings account for about 12.56% of total assets under management.Performance and RiskThe ETF has added roughly 9.33% so far this year and is up roughly 13.66% in the last one year (as of 09/08/2025). In the past 52-week period, it has traded between $76.98 and $100.38QQQE has a beta of 1.07 and standard deviation of 19.37% 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 a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.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 $186.11 billion in assets, Invesco QQQ has $366.38 billion. VUG has an expense ratio of 0.04% and QQQ changes 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 GrowthBottom 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>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 ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks