First Trust NASDAQ-100 Ex-Technology Sector Index Fund (QQXT) seeks to track the NASDAQ-100 Ex-Technology Sector Index, which measures the performance of the 100 largest non-financial companies in the NASDAQ-100 but excludes all technology sector stocks. This equity ETF provides exposure to large-cap growth companies in sectors like consumer discretionary, healthcare, and communication services.
How It Works
QQXT uses a passively managed, market-capitalization-weighted approach that mirrors its benchmark index by holding all non-technology stocks from the NASDAQ-100. The fund rebalances quarterly to maintain alignment with index changes and sector exclusions. With approximately 50-60 holdings after removing technology companies, the ETF concentrates in consumer discretionary giants like Tesla and Amazon, healthcare leaders, and communication services firms, creating a growth-oriented portfolio without traditional tech exposure.
Key Features
- Unique access to NASDAQ-100's largest non-tech companies, capturing growth characteristics without traditional technology sector exposure
- Concentrated portfolio of 50-60 mega-cap holdings provides focused exposure to dominant companies in excluded sectors
- Low 0.60% expense ratio offers cost-effective access to this specialized NASDAQ-100 subset strategy
Risks
- This ETF can lose value when large-cap growth stocks decline, potentially dropping 25-35% during market corrections given its growth-oriented holdings
- High concentration risk as top 10 holdings may represent 60%+ of assets, making performance heavily dependent on few mega-cap companies
- Sector concentration in consumer discretionary and communication services creates vulnerability to economic slowdowns affecting discretionary spending and advertising
Who Should Own This
Best suited as a satellite holding (10-20% of equity allocation) for investors with 3-5 year time horizons seeking large-cap growth exposure without traditional technology stocks. Medium-to-high risk tolerance required due to growth stock volatility and concentration. Appeals to investors wanting NASDAQ-100 characteristics while avoiding or reducing technology sector allocation in their portfolios.