Rolle im Portfolio
The PowerShares EQQQ ETF provides exposure to the largest non-financial equities listed on the Nasdaq Stock Market and as such, it can be used as a core portfolio holding. The NASDAQ 100 Index is commonly known as “the” US technology benchmark because of its high concentration of technology companies. The tech sector encompasses everything from computer hardware and software to telecommunications and represents almost two thirds of the index’s value. As such, this fund could appeal to investors looking to add a “tech” tilt to a well-diversified portfolio. However investors should be aware that from the perspective of individual names, this ETF is heavily biased towards Apple which accounts for 12% of its market capitalisation.
This fund can also serve as a tactical tool for those looking to place a bet on the near-to-medium-term prospects of the US large cap equity market--excluding financials--and the US technology industry in particular, under the belief that they are undervalued.
Fundamentale Analyse
The index that this ETF tracks is dominated by the technology sector; thus overall returns will be largely influenced by its performance.
In spite of some weak economic data, information technology (IT) spending has remained relatively robust over the past few years. Over the long-run, tech companies will continue to benefit from industry trends such as cloud computing and mobility. According to the Gartner Group – an IT research and advisory company – worldwide IT spending is expected to grow by 4.1% this year. Morningstar equity analysts expect companies exposed to these trends to benefit, despite a potential drop in overall demand compared to previous years. Other tech segments, like PC demand, have struggled on the back of a slowing global economy. Tablets and smartphones remain however a key driver for the chip industry.
The outlook for the US-economy remains mixed. In the short-term, slowing demand from China and Europe, coupled with the government’s fiscal retrenchment and a weakening auto industry may curb economic expansion. However, low inflation and an improving housing market should keep the economy on an overall growth path.
In fact, recent data suggest that consumers continue to spend. Consumer sentiment hit a nearly 6-year high of 83.7 in May, up from 76.4 in April and beating expectations for a rise to 78.0. Government spending cuts have been offset by higher equity prices, a strengthening housing market and falling gasoline prices. Inflation fell for a second straight month in April, reaching 1.7% - below the Fed’s 2% inflation target. Meanwhile, on the job front, the economy added 165k new jobs in April – with February and March data revised up to add an extra 114k – and the unemployment rate is at a four-year low of 7.5%.
Elsewhere, the Congressional Budget Office has reduced its 2013 federal fiscal deficit estimate to $642 billion from $845 billion on the back of a larger-than-expected surplus in April and received payments from Fannie Mae and Freddie Mac. The lower deficit is primarily driven by higher tax revenue, contained spending levels, a strong-than-expected economy and historical low interest rates. As some of the fiscal corrective measures have been introduced within the last year only, Morningstar’s analysts expect potentially better numbers in the years ahead. Currently, the annual deficit is expected to narrow to 2.1% of GDP by 2015; essentially solving the short-term budget crisis. However, these projections assume that the so-called budget sequester (i.e. no new spending programs) will remain in place, GDP growth accelerates, and interest rates remain at historical lows.
Some economists harbour concerns that the lower budget deficit policy might weigh on economic growth going forward; pointing to the fact that lower government spending has already reduced GDP growth by an average of 0.5% per annum since 2010. In addition, the government has cut more than 600k public sector jobs.
However, ultra-loose monetary policy continues to provide support. Despite some encouraging economic data of late, there are no signs that the Fed will change its current policy stance anytime soon.
Indexkonstruktion
The NASDAQ 100 Index provides equity exposure to the 100 largest non-financial securities listed on the Nasdaq Stock Market. It is a market capitalisation weighted index representing major industry groups, like computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. The index is calculated under a modified capitalisation-weighted method with the intention to retain in general the economic attributes of capitalisation-weighting while providing enhanced diversification. In order to achieve its objective, the NASDAQ 100 Index is reviewed quarterly and adjusts the weightings of index constituents using a proprietary algorithm, if certain pre-established weight distribution requirements are not met. To be eligible for the index, component stocks must be listed on the Nasdaq Stock market and meet a list of criteria, like being a non-financial company, trading at least 200,000 shares a day and being listed on the stock market for at least two years. As of writing, the index is heavily biased towards the technology sector (58%), followed by health care (13%) and retail (9%). The largest index constituent is Apple, representing 12% of the index’s value, followed by Microsoft (8%) and Google (7%). The index is therefore heavily top weighted as the top 10 holdings represent over 50% of the index.
Fondskonstruktion
The PowerShares EQQQ Fund uses physical replication to track the performance of the NASDAQ-100 Index. In order to achieve its objective, the index intends to invest in all of the component stocks of the reference index in their respective weightings. This fund engages in securities lending to generate additional revenues. The lending revenue generated can partially offset the TER. To protect the fund from the counterparty risk that results from this practice, PowerShares takes collateral greater than the loan value. Collateral levels vary but must be in excess of 102%, depending on the assets provided by the borrower as collateral. The fund may hold up to 20% of its NAV in securities from a single issuer in order to achieve his objectives. Under exceptional market conditions, the fund manager may invest up to 35% of the fund’s net assets in securities from a single issuer. In addition, the fund may also hold up to 10% of its NAV in other collective investments schemes. The fund may also invest in financial derivative instruments, including equivalent cash-settled instruments, dealt in on a regulated market. Moreover, the fund can deploy over-the-counter derivatives and invest up to 20% of its NAV in shares and/or debt securities issued by the same body in order to achieve its objective.
Gebühren
The fund levies a total expense ratio of 0.30%, which is in the upper of the range for ETFs tracking the NASDAQ 100. Other potential costs associated with holding this fund which are not included in the TER include rebalancing costs, bid-ask spreads and brokerage fees.
Alternativen
There is no scarcity of alternatives to this fund. Amundi, ComStage, iShares, Credit Suisse and Lyxor all provide ETFs tracking the NASDAQ 100 at lower TERs ranging from 0.23% to 0.31%. The largest alternative is the ETF from iShares, which charges a TER of 0.31%.
Investors looking for a more diversified index providing exposure to US equities could consider using the iShares S&P 500 Index ETF to express their view. The S&P 500 Index’s largest sector exposure is IT (18%), followed by financials (16%) and health care (13%). The biggest single issuer exposure is Exxon Mobil (3%), followed by Apple (3%).
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