Is First Trust NASDAQ-100-Technology Sector ETF (QTEC) a Strong ETF Right Now?
- June 11, 2025
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Designed to provide broad exposure to the Technology ETFs category of the market, the First Trust NASDAQ-100-Technology Sector ETF (QTEC) is a smart beta exchange traded fund launched on 04/19/2006.
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $2.63 billion, this makes it one of the larger ETFs in the Technology ETFs. QTEC is managed by First Trust Advisors. QTEC, 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 Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for QTEC are 0.57%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.02%.
Sector Exposure and Top Holdings
While 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 91.50% of the portfolio.
When you look at individual holdings, Palantir Technologies Inc. (class A) (PLTR) accounts for about 3.08% of the fund's total assets, followed by Microstrategy Incorporated (class A) (MSTR) and Crowdstrike Holdings, Inc. (class A) (CRWD).