Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE) is a smart beta ETF within the Style Box – Large Cap Growth category. Launched in March 2012, its goal is to mirror the NASDAQ-100 Equal Weighted Index, focusing less on market capitalization. Smart beta ETFs provide alternatives for investors who don’t want to rely only on market cap indexes. They use different strategies, such as equal weighting, to aim for improved risk-return performance. Some methods focus on volatility-based weighting.

Focusing on Assets and Expenses

Managed by Direxion, QQQE has over $1.13 billion in assets. Its annual operating expenses are 0.35%, which is competitive with similar ETFs. The fund offers a 12-month trailing dividend yield of 0.59%. In terms of sectors, the fund invests 40.3% in Information Technology, with Consumer Discretionary and Healthcare sectors following. Major holdings include Advanced Micro Devices, Intel, and Marvell Technology, with the top ten holdings accounting for 11.97% of total assets. Performance-wise, the ETF has risen about 8.14% over the past year, with a 52-week trading range between $76.98 and $105.23. With 102 holdings, QQQE effectively spreads out risk. Alternatives include the Vanguard Growth ETF and Invesco QQQ, both of which have substantial assets and lower expense ratios. The key point is that QQQE allows trading in the NASDAQ-100 without heavy reliance on a few mega-cap stocks. Since the top ten stocks in the market-cap-weighted NASDAQ-100 make up over 55% of the index, QQQE offers exposure to a broader market rally. This presents an opportunity for a “catch-up” trade among the other 90 stocks in the index.

Outlook and Trading Strategies

With the latest October 2025 CPI report showing a cooler-than-expected rate of 2.8%, we believe the Federal Reserve’s cycle of rate hikes may be finished. Historically, this environment benefits smaller, high-growth companies that are more sensitive to rising interest rates. For derivative traders, this could create an opportunity to invest in the equal-weighted index, potentially outperforming its market-cap-weighted counterpart, QQQ. The fund’s beta is 1.09, indicating it carries slightly more systematic risk, which could enhance gains in a market rally. Following the inflation news, the VIX dropped from over 22 to nearly 18, suggesting a decrease in overall market fear. Traders might consider buying call spreads on QQQE to take advantage of a possible price increase while minimizing premium costs. This potential shift isn’t new; similar patterns were seen during the market recoveries in late 2022 and early 2024. During those times, market breadth improved, and equal-weight strategies briefly outperformed as capital flowed beyond the largest tech firms. Looking at options open interest, we’re already noticing an increase in call buying for QQQE compared to puts for the December 2025 expirations. Create your live VT Markets account and start trading now.

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