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QQQE: Equal Weight Nasdaq

Posted By Barry Ritholtz On February 9, 2013 @ 4:56 pm In Index/ETFs,Technology | Comments Disabled

Traditional QQQ Weighting
click for larger graphic
Source: Nasdaq [2]


Long overdue and excellent idea:

Part of the problem with the Nasdaq QQQ’s has bee on the oversize weighting of a few giant market names in it. Certainly Apple (AAPL), but also Microsoft (MSFT), Google (GOOG) and others. Note that chart above dates from 12/31/2012 — after Apple began its slide, and yt still, it was almost 1/6th of the Qs.

The new QQQE is an equal weight set of Nasdaq holdings, each contributing 1% to the overall mix. This reducedĀ  Information Technology from 63% to 49%, and raises just about all other sectors in the index.

I’d love to see a chart comparing the cap weighted and equal weighted indices.



UPDATE: February 9 2013 5:39pm

Tom Brakke of The Research Puzzle [3] sends along this chart


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URL to article: http://www.ritholtz.com/blog/2013/02/qqqe-equal-weight-nasdaq/

URLs in this post:

[1] Image: http://www.ritholtz.com/blog/wp-content/uploads/2013/02/Nasdaq-100-12312012.jpg

[2] Nasdaq: http://www.direxionfunds.com/products/direxion-nasdaq-100-equal-weighted-index-etf/?utm_source=Twitter&utm_medium=referral&utm_campaign=DirexionFunds&buffer_share=e2dea

[3] The Research Puzzle: http://researchpuzzle.com/

[4] Image: http://www.ritholtz.com/blog/wp-content/uploads/2013/02/QQQ-vs-QQQE-zXNDX.png

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