Yahoo Finance Should Fidelity Nasdaq Composite Index ETF (ONEQ) Be on Your Investing Radar?
Launched on 09/25/2003, the Fidelity Nasdaq Composite Index ETF (ONEQ) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Fidelity. It has amassed assets over $6.78 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that fall in the large cap category tend to 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.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.21%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.63%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 45.80% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT) accounts for about 11.67% of total assets, followed by Apple Inc (AAPL) and Nvidia Corp (NVDA).
The top 10 holdings account for about 55.32% of total assets under management.
Performance and Risk
ONEQ seeks to match the performance of the NASDAQ Composite Index before fees and expenses. The NASDAQ Composite TR USD is the market capitalization-weighted index of over 3,300 common equities listed on the Nasdaq stock exchange.
The ETF return is roughly 19.20% so far this year and was up about 33.24% in the last one year (as of 06/28/2024). In the past 52-week period, it has traded between $49.61 and $70.42.
The ETF has a beta of 1.11 and standard deviation of 22.33% for the trailing three-year period, making it a medium risk choice in the space. With about 1013 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity Nasdaq Composite Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, ONEQ is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $134.30 billion in assets, Invesco QQQ has $284.94 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
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.
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Fidelity Nasdaq Composite Index ETF (ONEQ): ETF Research Reports
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
Vanguard Growth ETF (VUG): ETF Research Reports
