Tech has been a hot sector to invest in over the past year but with valuations skyrocketing for many stocks, investors may want to look elsewhere for buying opportunities. While tech is undoubtedly a large part of the Nasdaq, you can invest in top stocks on the Nasdaq without having to be tech heavy.
One exchange-traded fund (ETF) that provides investors with such diversification is the First Trust NASDAQ-100 Ex-Technology Sector Index (NASDAQ:QQXT). The fund has 59 holdings, including Constellation Energy (NASDAQ:CEG), Moderna (NASDAQ:MRNA), and Costco Wholesale (NASDAQ:COST). It does have some stocks which may be considered tech, such as Netflix (NASDAQ:NFLX) and Amazon.com (NASDAQ:AMZN) but they are classified under consumer discretionary.
The consumer discretionary sector accounts for 32% of all of the fund’s holdings, with healthcare being the next largest sector at 21%. Industrials at 16% and consumer staples at 11% round out all the sectors which make up at least 10%.
So far this year, with the focus being heavy on tech, the fund has been a bit underwhelming, with it rising by just 1% thus far. But over a five-year period, this has still made for a solid investment to own as the ETF has generated total returns, which include dividends, of around 77% during that time frame.
This is a fund which may be ideal for investors who want some diversification or perhaps just some safety outside of tech. While the fund may not generate the highest returns, it can be an attractive option for risk-averse investors.
