The Nasdaq Composite is currently laboring around 3,950 area, good enough for a year-to-date gain of almost 31%.
That is still a far cry from the intra-day high of 5,132.52, and all-time closing high of 5,048.62 seen in March 2000, but it cannot be forgotten that the Nasdaq Composite surged more than 27% in the fourth quarter of 1999.
Indeed, anything is possible and even a flirtation with the 5,000 area by the Nasdaq Composite would be a boon for the PowerShares QQQ (NasdaqGS: QQQ). QQQ, the NASDAQ-100 tracking ETF, is having a banner year, up nearly 24%. With over $1.8 billion worth of inflows, QQQ is the second-best PowerShares ETF in terms of asset-gathering proficiency this year. [Access the Nasdaq 100 With This ETF]
QQQ’s all-time high, $117.56 touched on March 20, 2000, is nearly 42% above where the ETF currently trades. Split the difference and say the Nasdaq Composite can “only” get to 4,500 and there is still tremendous upside potential left for QQQ.
However, ETFs that offer different spins on the Nasdaq have recently been making a series of all-time highs.
Perhaps the most unheralded member of that group is the Direxion NASDAQ-100 Equal Weighted Index Shares (NYSEArca: QQQE). Equal-weight ETFs have risen to prominence in recent years and that has carried over to tech-centric funds. Said differently, Apple’s (NasdaqGM: AAPL) fall from around $700 to below $400 underscored the risks of ETFs with excessive weights to shares of the iPad maker.[Dodge Apple With These Tech ETFs]
QQQE is up nearly 29% year-to-date and currently trades at $51.30, just 41 cents below its all-time high. The rival First Trust NASDAQ-100 Equal Weighted Index Fund (NasdaqGS: QQEW) is also higher by nearly 29% despite Apple, Amazon (NasdaqGM: AMZN) and Google (NasdaqGM: GOOG) combining for less than 3.5% of the ETF’s weight. [Nasdaq 100 ETF Takes Equal-Weight Approach]
Investors have been buying into the Nasdaq equal-weight approach as QQEW has attracted almost $139 million in assets this year. That is more than half its current AUM total of nearly $262 million. QQEW is currently 20 cents below its all-time high.
The First Trust NASDAQ-100 Ex-Technology Sector Index Fund (NasdaqGS: QQXT) is the star of the Nasdaq ETF group with a year-to-date gain of 32%. QQXT has been hitting all-time highs despite its exclusion of tech stocks. What would seem like an impediment is not because the QQXT allocates nearly two-thirds of its combined weight to consumer services names (Amazon for example) and health care (think biotech). [Take the Nasdaq, Leave the Tech]
First Trust NASDAQ-100 Ex-Technology Sector Index Fund
Tom Lydon’s clients own shares of Apple, Amazon, Google and QQQ.