An equal-weighted ETF tracking the Nasdaq-100 Index saw notable inflows on Wednesday with Apple (NasdaqGS: AAPL) shares under pressure this week.
In fact, First Trust NASDAQ-100 Equal Weighted Index Fund (NasdaqGM: QQEW) saw record one-day trading volume with more than 6.6 million shares trading hands. The ETF’s average daily volume over the past three months is about 173,400 shares, including Wednesday’s surge. The previous one-day volume record was about 1.1 million shares.
What’s more, the equal-weighted ETF started Wednesday with about 5.9 million shares outstanding while nearly 6.7 million shares traded.
The trading spike appears to be the result of a large inflow, said Paul Weisbruch at ETF liquidity provider Street One Financial. The trade could also be a “tax swap” to QQEW from PowerShares QQQ (NasdaqGM: QQQ), he added.
QQQ tracks the traditional Nasdaq-100 with individual stocks weighted by market cap. Apple is the largest holding in QQQ at 12.3% of the portfolio. [Nasdaq-100 ETF Highest Since 2000]
QQEW, on the other hand, allocates 1% to each stock in the index, and rebalances on a quarterly basis to maintain the equal weighting.
Direxion NASDAQ-100 Equal Weighted Index Shares (NYSEArca: QQQE) follows a similar strategy.
QQQE holds $7.4 million of assets while QQEW holds $196.7 million. [Equal-Weight Nasdaq ETF to Get Around the Apple Factor]
Apple shares recovered somewhat on Thursday after a steep two-day slide. Wall Street analysts downgraded the stock after the tech giant unveiled the latest versions of the iPhone. [Apple Sells Off]
First Trust NASDAQ-100 Equal Weighted Index Fund
Full disclosure: Tom Lydon’s clients own AAPL and QQQ.