What Is QTEC? First Trust NASDAQ-100-Technology Sector Index Fund
Last updated September 2026
Short answer
QTEC is First Trust NASDAQ-100-Technology Sector Index Fund, an ETF that tracks the NASDAQ-100 Technology Sector Index at a 0.55% expense ratio. QTEC's holdings list is the giveaway. The largest position is Applied Materials at 3.4% and the tenth is Palo Alto Networks at 2.5%, a range of less than a percentage point across the whole top ten. Apple, Microsoft and NVIDIA, the three largest technology companies in the parent index, do not appear at all. That is because the fund weights its constituents equally rather than by market value, and rebalances back to equal weight on a set schedule. First Trust charges 0.55%, the fund holds $5.0B and it launched in 2006.
QTEC is issued by First Trust and tracks the NASDAQ-100 Technology Sector Index. It charges a 0.55% expense ratio, holds approximately $5.0B in assets under management, yields about 0.01%, and launched in 2006.
Equal weight is why the biggest names are not at the top
In a market-value-weighted technology fund, the largest three or four companies routinely make up half or more of the portfolio. Equal weighting removes that entirely. Every constituent starts each period at the same size, so a company with a two trillion dollar market value and one with a twenty billion dollar market value carry identical weight in the fund.
The visible result is the top ten running from 3.4% down to 2.5%, totalling roughly 27.6%. The positions at the top are simply the ones whose share prices have risen most since the last rebalance, not the biggest companies. Apple, Microsoft and NVIDIA are in the fund; they are just no larger in it than any other constituent.
This makes QTEC a very different instrument from a conventional technology fund even though the two draw from an overlapping universe. It is far more exposed to mid sized technology companies, and far less exposed to the handful of mega caps that dominate the sector's market value. Anyone using it as a proxy for large-cap technology exposure is holding something else.
Semiconductor equipment is the centre of gravity
Applied Materials at 3.4%, KLA at 3.3%, Lam Research at 2.9%, Teradyne at 2.7% and ASML at 2.6% mean roughly 14.9% of the fund sits in companies that make the machines used to manufacture and test semiconductors. That is a large single-industry weight, and it arrives partly by chance: these stocks have risen since the last rebalance, so they occupy the top.
Semiconductor equipment is a distinctive business. It sells capital goods into a cyclical industry, so orders arrive in waves tied to fabrication plant construction and capacity decisions rather than to end demand for chips directly. It also carries geopolitical exposure through export controls on advanced tools.
The rest of the top ten spans different corners: Marvell Technology and Astera Labs in data centre semiconductors, SanDisk in memory storage, Intel as a manufacturer in transition and Palo Alto Networks in security software. Technology is 86% of the fund, with communication services at 8%, consumer discretionary at 4% and industrials at 2%.
0.55% and what rebalancing costs
0.55% is high for a rules-based index fund and roughly seven times what the cheapest technology sector funds charge. Part of that reflects the equal-weight mechanics: rebalancing back to equal weight requires selling what has risen and buying what has not, on a regular schedule, across every constituent. That trading is a real cost, and it is separate from the expense ratio.
The same mechanic has tax implications. Regular rebalancing realises gains inside the fund more often than a market-value-weighted index does, since a cap-weighted index needs no trading at all when prices move. The ETF wrapper absorbs much of that through in-kind redemptions, but equal-weight strategies are structurally less inert than cap-weighted ones.
The 0.01% yield is effectively zero, which is unsurprising for a technology fund and means the entire outcome is price-driven. There is no meaningful annual income tax cost from distributions, with the tax consequence arriving on sale.
QTEC holdings: top 10
Approximate weights as of August 2026. Each ticker links to its individual stock guide in Walnut.
How do I invest in QTEC?
There are three common ways to get QTEC exposure. Buy shares (or fractional shares) of QTEC directly at any major broker that lists it. Hold it as a core position and layer more concentrated ideas on top. Or build it into a thematic portfolio in Walnut, so QTEC sits alongside other holdings that express the same thesis, with target weights you can rebalance toward. QTEC trades like a stock during market hours, so you buy it the same way you would any listed share.
New to buying funds? See how to buy an ETF, step by step.
Is QTEC a good buy?
Whether QTEC is a good buy depends less on any single call and more on your time horizon and what you already hold: it tracks the NASDAQ-100 Technology Sector Index, so the real question is whether you want that exposure in your mix and at what weight. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is QTEC a buy?
The bottom line on QTEC
QTEC gives you the NASDAQ-100 Technology Sector Index exposure in one ticker at a 0.55% expense ratio. Most investors use it as a core holding and layer more concentrated thematic portfolios on top.
More on QTEC
Whether QTEC is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is QTEC a buy?
QTEC yields 0.01% as of August 2026, paid by passing through the dividends of its underlying holdings. For the payout schedule, history, and how the distributions are taxed, see QTEC dividend: yield and schedule.
New to funds like QTEC? Start with what an ETF is, then how to buy an ETF, or browse the full guide to ETF investing.
Wondering how QTEC fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in QTEC with AI
Connect the broker you already use and ask Walnut's AI how QTEC fits what you actually hold: what it overlaps with, what it leaves you exposed to, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
Why are NVIDIA, Apple and Microsoft not in the top ten?
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Because the fund weights every constituent equally rather than by market value. All three are held, but at the same weight as every other company in the index. The names at the top of the holdings list are simply those whose share prices have risen the most since the last scheduled rebalance, which is a very different selection principle from company size.
Is QTEC equal weighted?
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Yes. The tight range across the top ten, from 3.4% down to 2.5%, is the visible evidence, along with the absence of the sector's largest companies from the top of the list. The fund resets holdings back to equal weight on a scheduled basis, which mechanically trims what has risen and adds to what has lagged.
What is the NASDAQ-100 Technology Sector Index?
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It takes the technology companies within the Nasdaq-100 and builds an index from that subset, weighted equally rather than by market value. Because it is drawn from the Nasdaq-100, it inherits that index's listing-based universe, which excludes technology companies listed on other exchanges. It is a narrower and differently constructed list than a broad technology sector index.
How does QTEC differ from a Nasdaq-100 fund?
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A Nasdaq-100 fund holds all non-financial constituents weighted by market value, so its largest companies dominate and it includes consumer, healthcare and communications businesses. QTEC takes only the technology members and equal weights them. The result is far less mega-cap concentration and far more exposure to mid sized technology companies, at 86% technology overall.
How does it differ from a market-cap-weighted technology sector fund?
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The largest technology companies are often half or more of a cap-weighted sector fund. In QTEC they carry the same weight as every other constituent. The two funds can move quite differently, particularly during periods when the very largest companies lead or lag the rest of the sector. QTEC also draws only from Nasdaq-listed companies.
Why does QTEC cost 0.55%?
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Equal-weight strategies require ongoing trading to reset weights, which is more expensive to run than a cap-weighted index that needs no trading when prices move. First Trust also prices its products above the large passive providers generally. At roughly seven times the cheapest sector alternatives, the fee is a meaningful annual cost that the equal-weight approach has to justify.
What does the 0.01% yield indicate?
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That essentially none of the fund's outcome comes from income. Technology companies in this universe mostly reinvest rather than distribute, and the ones that do pay have small yields diluted further by equal weighting. In practical terms the fund produces almost no taxable distributions each year, deferring the tax consequence until you sell.
Does rebalancing create tax consequences?
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Some. Resetting to equal weight means selling holdings that have appreciated, which realises gains inside the fund. A cap-weighted index requires no such trading. The ETF structure absorbs much of this through in-kind redemptions, so distributed capital gains are usually limited, but equal-weight funds are structurally more active internally than cap-weighted ones.
What is QTEC's expense ratio?
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QTEC has an expense ratio of 0.55% per year as of August 2026, charged by First Trust and deducted from the fund's value rather than billed to you separately. On a $10,000 position that is roughly $55 a year. Fees compound over time, so on a long-term holding the expense ratio is one of the few return drivers you control. It is worth comparing against other funds that track the NASDAQ-100 Technology Sector Index before you choose.
How do I compare QTEC to similar ETFs?
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Put a few fields side by side: the expense ratio (fees compound over decades), the index or strategy it tracks, the top holdings and how much they overlap with what you already own, the dividend yield, and the AUM, liquidity, and bid-ask spread that affect trading costs. For index funds, tracking error (how closely it follows its index) and tax efficiency matter too. QTEC's figures are above; the full method is in Walnut's guide on how to compare ETFs.
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Walnut is informational, not investment advice. Holdings weights and fund statistics on this page are approximations stamped to August 2026; verify current figures against First Trust's fund page or your broker before investing.