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

Making its debut on 04/19/2006, smart beta exchange traded fund First Trust NASDAQ-100-Technology Sector ETF (QTEC) provides investors broad exposure to the Technology ETFs category of the market.What Are Smart Beta ETFs?Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.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 $2.91 billion, this makes it one of the larger ETFs in the Technology ETFs. QTEC is managed by First Trust Advisors. This particular fund, before fees and expenses, seeks to match the performance of the NASDAQ-100 Technology Sector Index.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.Cost & Other ExpensesFor ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.Annual operating expenses for this ETF are 0.55%, making it on par with most peer products in the space.QTEC's 12-month trailing dividend yield is 0.00%.Sector Exposure and Top HoldingsIt is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.QTEC's heaviest allocation is in the Information Technology sector, which is about 87.4% of the portfolio. Its Telecom and Consumer Discretionary round out the top three.When you look at individual holdings, Micron Technology, Inc. (MU) accounts for about 3.15% of the fund's total assets, followed by Applied Materials, Inc. (AMAT) and Intel Corporation (INTC).The top 10 holdings account for about 28.06% of total assets under management.Performance and RiskThe ETF return is roughly 22.18% so far this year and it's up approximately 20.2% in the last one year (as of 12/19/2025). In the past 52-week period, it has traded between $149.56 and $243.76The ETF has a beta of 1.29 and standard deviation of 25.76% 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 is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.State Street 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. State Street Technology Select Sector SPDR ETF has $91.97 billion in assets, Vanguard Information Technology ETF has $110.62 billion. XLK has an expense ratio of 0.08% and VGT changes 0.09%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFsBottom 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 First Trust NASDAQ-100-Technology Sector ETF (QTEC): 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