QQEW Profile
The First Trust NASDAQ-100 Equal Weighted Index Fund is designed to provide investment results that closely correspond to the performance of the NASDAQ-100 Equal Weighted Index. This index is a modified version of the well-known NASDAQ-100 Index, featuring an equal-weighted methodology. Unlike the traditional NASDAQ-100 Index, which weights its constituent companies by market capitalization, the equal-weighted index allocates equal weight to each of the 100 largest non-financial companies listed on Nasdaq. This approach aims to offer a more balanced exposure across the index's components, reducing the influence of larger companies and potentially providing diversified performance benefits.
Under normal market conditions, the fund invests at least 90% of its net assets, including any investment borrowings, in the common stocks and depositary receipts that make up the NASDAQ-100 Equal Weighted Index. This investment strategy ensures that the fund's holdings mirror the index's composition, which includes major U.S. and international non-financial companies. The equal weighting of companies in the index allows for a more equitable distribution of investment across all constituents, regardless of their individual market capitalization, which can mitigate the impact of large-cap stocks' fluctuations on the fund's overall performance.
The First Trust NASDAQ-100 Equal Weighted Index Fund provides investors with exposure to a broad array of industry-leading companies that span diverse sectors, excluding financials. By focusing on the equal-weighted index, the fund seeks to balance the exposure among its constituent companies, potentially enhancing the performance of smaller and mid-sized firms relative to a capitalization-weighted approach. This strategy may offer investors a unique opportunity to benefit from the growth of leading non-financial companies without the skew typically associated with market-cap-weighted indices.
As an ETF tracking an equal-weighted index, the First Trust NASDAQ-100 Equal Weighted Index Fund emphasizes a diversified investment approach. This method aligns with the fund's objective of delivering a performance profile that differs from traditional market-cap-weighted indices. By investing equally in all the constituent stocks of the NASDAQ-100 Equal Weighted Index, the fund aims to provide a distinctive blend of growth potential and risk management, offering investors a strategic alternative to other index-based investment products.
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