For Immediate Release
Chicago, IL – June 01, 2015 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks and ETFs recently featured in the blog include the Apple (AAPL), Google (GOOGL),PowerShares QQQ ETF (QQQ), First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW) and Fidelity Nasdaq Composite Index Tracking Stock (ONEQ ).
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Here are highlights from Friday’s Analyst Blog:
3 Tech-Inspired ETFs to Ride the Nasdaq Bull
The tech heavy Nasdaq Composite Index has been on a tear this year, gaining 7.6% amid bouts of volatility. The benchmark crossed the 5,000 threshold for the first time in early March since the 2000 dot-com bubble and is now hitting new highs at regular intervals (read: Nasdaq Hits 5,000 on Tech Mergers: Semiconductor ETFs Surge ).
One has to thank the surging technology sector for this, which is riding high on an improving economy, better job prospects and rising consumer confidence. Economically sensitive sectors like technology generally pick up in an expanding economic cycle. Impressive comeback performances from some of the tech giants like Apple (AAPL) and Google ( GOOGL), and solid run-up of chipmakers are adding to the strength.
Further, growing demand for novel and advanced technologies such as cloud computing, big data, smartphones, high-speed fiber networks, and the Internet of Things will continue to fuel growth in the sector. And not to forget, most of these tech companies are sitting on a huge pile of cash and are in a position to increase payouts to their shareholders. The cash reserves will ensure that these companies are not plagued by financial trouble even in a rising interest rate environment, the prospect of which is looming later this year.
For a gauge of how important the technology sector has become for the S&P 500, the following data is self-explanatory. The sector’s earnings growth was more than twice that of the S&P 500 in the last couple of quarters and is expected to outperform the broad market index this year given its robust growth rate of 6.9% versus the S&P 500 growth of 0.9%. With respect to revenue growth, the sector will likely see a 4.4% increase versus a 5.8% decline for the S&P 500
Expectations of outperformance have infused strong confidence in the sector, propelling the Nasdaq stocks and ETFs higher. Additionally, merger frenzy across the globe is fueling strength in the stocks. Given this, we’ve highlighted three ETFs that could be compelling choices for investors seeking to ride the Nasdaq bull (read: 3 Stocks Driving the Nasdaq 100 ETF to New Highs ).
PowerShares QQQ ETF (QQQ)
This fund tracks the Nasdaq-100 Index, which measures the performance of the largest domestic and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization. Holding 107 stocks in its basket, the fund is concentrated in the top firm – Apple - at 14.7%, followed by a 7.4% allocation to Microsoft. Other firms hold no more than 3.82% of assets (read: Believe in Icahn? Bet on These Apple ETFs ).
While information technology dominates the fund’s portfolio with 56.3% share, consumer discretionary and health care account for double-digit exposure each. The product is one of the largest and most popular funds in the large-cap space with AUM of $38.1 billion and average daily volume of more than 30.8 million shares. It charges 20 bps in annual fees and has gained 7.7% in the year-to-date time frame. The fund has a Zacks ETF Rank of 2 or Buy rating with a Medium risk outlook.
First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW)
This fund holding 107 stocks provides equal exposure to the stocks of the Nasdaq-100 Index. Netflix, Kraft Foods Group and Altera are the top three holdings in the fund’s basket with none accounting for more than 1.45% share. Technology takes the top spot at 38.1% while consumer services and health care round off the top three with 27.9% and 11.9%, respectively (read: Kraft Food Buyout Put These ETFs in Focus ).
The fund has amassed $689.1 million in its asset base while it trades in volumes of nearly 102,000 shares a day on average. It charges 60 bps in annual fees, which is higher than most funds in the large-cap space. QQEW has returned 5.7% year to date and has a Zacks ETF Rank of 3 or ‘Hold’ rating with a Medium risk outlook.
Fidelity Nasdaq Composite Index Tracking Stock ( ONEQ )
This ETF tracks the Nasdaq Composite Index, holding a broad basket of 1,915 stocks. It is concentrated in Apple with a near double-digit exposure followed by Microsoft at 5%. Other firms hold less than 2.6% share. From a sector look, information technology makes up for 46.2% of total assets while consumer discretionary and health care also receive double-digit allocation each.
ONEQ has been underappreciated by investors as depicted by its AUM of $472.8 million and average daily volume of less than 23,000 shares. The expense ratio came in at 0.21%. The product has surged 8.2% in the year-to-date frame.
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APPLE INC (AAPL): Free Stock Analysis Report
GOOGLE INC-CL A (GOOGL): Free Stock Analysis Report
NASDAQ-100 SHRS (QQQ): ETF Research Reports
FIRST N-100 EQW (QQEW): ETF Research Reports
FIDLTY NDQ CMP (ONEQ): ETF Research Reports
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