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

The First Trust NASDAQ-100-Technology Sector ETF (QTEC) was launched on 04/19/2006, and is a smart beta exchange traded fund designed to offer 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.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

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.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

The fund is sponsored by First Trust Advisors. It has amassed assets over $4.64 billion, making it one of the larger ETFs in the Technology ETFs. Before fees and expenses, QTEC 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

For 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.

With on par with most peer products in the space, this ETF has annual operating expenses of 0.55%.

The fund has a 12-month trailing dividend yield of 0.01%.

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.

Representing 84.6% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Telecom and Consumer Discretionary round out the top three.

Taking into account individual holdings, Doordash, Inc. (class A) (DASH) accounts for about 3.01% of the fund's total assets, followed by Palo Alto Networks, Inc. (PANW) and Shopify Inc. (class A) (SHOP).

Its top 10 holdings account for approximately 27.04% of QTEC's total assets under management.

Performance and Risk

The ETF return is roughly 35.07% so far this year and was up about 42.94% in the last one year (as of 09/10/2026). In the past 52-week period, it has traded between $207.03 and $335.74

The fund has a beta of 1.43 and standard deviation of 26.90% for the trailing three-year period, which makes QTEC a high risk choice in this particular space. With about 48 holdings, it has more concentrated exposure than peers .

Alternatives

First 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 Index Fund ETF Shares (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. State Street Technology Select Sector SPDR ETF has $122.33 billion in assets, Vanguard Information Technology Index Fund ETF Shares has $148.05 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 ETFs

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