Evolve Launches Canadian ETF Tracking Nasdaq Technology Index
Technology stocks have made a roaring comeback in 2023, driven by excitement over AI and cloud computing, as well as lower inflation and the perception that rate hikes are coming to an end.
Against this backdrop, Evolve ETFs has launched the Evolve NASDAQ Technology Index Fund (QQQT) on the Toronto Stock Exchange, providing another way for investors in Canada to participate in this high growth sector.
Evolve is among Canada’s fastest-growing ETF providers. The firm launched its first ETF in September 2017 and has since grown to have more than CAD$6 billion in assets under management. Its suite of ETFs provides investors with access to index-based income strategies, long-term investment themes and some of the world’s leading investment managers.
“Evolve’s name is rooted in the changing Canadian investment landscape. The decision-making process of accessing information and selecting investment products is changing for financial advisors and investors,” says Raj Lala, President and CEO of Evolve ETFs. “With the rapid increase in the ETF adoption rate in the last decade, our goal is to help make these products a staple in many Canadians’ investment portfolios.”
QQQT is a passive strategy that seeks to track the Nasdaq-100 Technology Sector Adjusted Market-Cap Weighted™ Index (NDXT10™) before fees and expenses. NDXT10 is designed to measure the performance of the technology companies in the Nasdaq-100® Index (NDX®), which measures the performance of 100 of the largest non-financial companies listed on the Nasdaq Stock Market. It consists of a selection of securities in NDX, which must be classified as a technology company according to the Industry Classification Benchmark (ICB). NDXT10 is a modified market capitalization-weighted index, which is what distinguishes it from the equal-weighted Nasdaq-100 Technology Sector Index™ (NDXT™). No issuer weight may exceed 10% of NDXT10. The ETF is rebalanced on a quarterly basis in March, June, September and December and published in U.S. dollars. Distributions will be paid quarterly.
The fund may hold the constituent securities of NDXT10 in about the same proportion as they are reflected in the index. As of the launch date, the portfolio comprises 38 holdings, with the top 10 holdings including Nvidia (NVDA), Meta Platforms (META), Apple (AAPL), Microsoft (MSFT), Broadcom (AVGO), Alphabet (GOOGL and GOOG), Adobe (ADBE), Advanced Micro Devices (AMD) and Texas Instruments (TXN).
The new ETF comes in three flavors: Canadian dollar hedged Units (QQQT), Canadian dollar unhedged units (QQQT.B) and U.S. dollar unhedged units (QQQT.U). The management fee is 0.25% of the NAV, plus applicable sales taxes.
QQQT may be suitable for those who want to invest in technology companies, are willing to take the risk associated with equity investments and are seeking capital appreciation by replicating the index’s performance.
“The technology sector has outperformed the broader Nasdaq-100® Index and driven most of the returns over every major period in the last 10 years,” he concludes. “QQQT can be a great portfolio completion tool by providing investors with pure-play access to only the technology sector of the Nasdaq-100 Index®.”
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
