Should State Street SPDR Portfolio Nasdaq 100 ETF (QNDX) Be on Your Investing Radar?

Why Large Cap Blend

Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.1%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector -- about 58.6% of the portfolio. Telecom and Consumer Discretionary round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 8.17% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).

The top 10 holdings account for about 46.05% of total assets under management.

Performance and Risk

QNDX seeks to match the performance of the NASDAQ 100 INDEX before fees and expenses. The Nasdaq-100 Index measures the performance of 100 of the largest domestic and international non-financial companies, based on market capitalization, listed on The Nasdaq Stock Market LLC.

The ETF has lost about 2.53% so far. In the past 52-week period, it has traded between $22.42 and $24.94.

With about 106 holdings, it effectively diversifies company-specific risk.

Alternatives

State Street SPDR Portfolio Nasdaq 100 ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, QNDX is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Core S&P 500 ETF (IVV) and the Vanguard 500 Index Fund ETF Shares (VOO) track a similar index. While iShares Core S&P 500 ETF has $895.62 billion in assets, Vanguard 500 Index Fund ETF Shares has $1,025.82 billion. IVV has an expense ratio of 0.03% and VOO charges 0.03%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

Boost Your Portfolio with Our Top ETF Insights

Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.

Don’t miss out on this valuable resource. It’s free!

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research